(By Salman - iStockAnalyst Writer)

US stocks rallied on Thursday after General Electric assured that ratings cut would not have any "significant operational or funding impacts." Shares also climbed after Bank of America CEO Ken Lewis said that the bank was profitable in the months of January and February.

The Dow Jones Industrial Average rallied 239.66 points or 3.46% to finish at 7,170.06. The S&P 500 jumped 2.38 points or 4.07% to 750.74. The Nasdaq Composite gained 54.46 points or 3.97% to end at 1,426.10.

Shares of Bank of America (NYSE: BAC) soared 92 cents or 18.66% to $5.85 after CEO Ken Lewis said that the bank was profitable in the first two months of this year. “We expect to be profitable” in current year, Lewis said, adding that the bank may earn $50 million in 2009 before taxes, credit losses and writedowns. Citigroup Inc. (NYSE: C) increased 13 cents or 8.44% to $1.67.J.P Morgan (NYSE: JPM) jumped $2.80 or 13.73% to $23.20. Wells Fargo & Company (NYSE: WFC) surged $2.07 or 17.42% to $13.95.American Express Co. (NYSE: AXP) finished at $13.15, up $1.22 or 10.23%.

General Electric (NYSE: GE) gained $1.08 or 12.72% to $9.57 after Standard & Poor's lowered its long-term ratings on the diversified firm and its units, by one notch to AA+ from top tier AAA and raised its outlook to stable.

General Motors (NYSE: GM) advanced 32 cents or 17.20% to $2.18 after it said that it can survive through March without the additional $2 billion in federal loans.

Energy stocks finished up. Exxon Mobil (NYSE: XOM) rose $1.38 or 2.10% to $67.15. Chevron Corp. (NYSE: CVX) added $2.18 or 3.56% to end at $63.40.

Pfizer Inc (NYSE: PFE) rallied $1.23 or 9.62% to $14.02 after it said that it has ended a successful trial of its cancer drug Sutent early, after study showed that the drug effectively slowed the progression of advanced pancreatic cancer.

Swiss pharmaceutical major Roche said on Thursday that it has agreed to buy California-based Genentech's (NYSE: DNA) 44% stake, that it doesn't already own, for $46.8 billion or $95 per share. Shares of Genetech rose $1.75 or 1.90% to $93.92.

Gilead Sciences Inc. (NASDAQ: GILD) announced on Thursday it will acquire CV Therapeutics Inc. (NASDAQ: CVTX) for $20 a share in a deal valued at $1.4 billion. Shares of CV Therapeutics jumped $5.04 or 31.50% to $21.04. Gilead added 39 cents or 0.89% to end at $44.43.

Stocks also got a boost from a better than expected retail sales data. According to US Commerce Department, retail sales dropped 0.1% to $375.5 billion in February from prior month. Economists expected a decline of 0.5%.

However, a release by Department of Labor showed that number of Americans filing first- time claims for unemployment benefits rose by 9,000 to 654,00 in the week ending March 7. Economists had forecast jobless claims to fall to 644,000. The four-week average of seasonally adjusted initial jobless claims, a less volatile gauge, climbed by 6,750 to 650,000. Continuing claims for the week ending Feb. 28 jumped 193,000 to a record 5.32 million.

European stocks settled higher. The U.K. FTSE rose 18.25 points or 0.49% to close at 3,712.06. The German DAX and French CAC advanced 108% and 0.75% respectively. Asian stocks finished with strong gains. The Nikkei 225 jumped 321.14 points or 4.55% to 7,376.12. The Hang Seng index of Hong Kong rose 236.61 points or 2.02% to 11,930.66.

NYMEX crude oil for April delivery climbed $4.61 or 11% to settle at $46.94 a barrel.
 
Disclosure: Author does not own any of the stocks discussed here.