On Thursday, the 30-stock Dow Jones industrial average finished higher by 239.66 points, or 3.46%, at 7,170.06. The broad S&P 500 index was up 29.38 points, or 4.07%, at 750.74. The tech-heavy Nasdaq composite index added 54.46 points, or 3.97%, to 1,426.10. NYSE breadth was 28-3 positive, while Nasdaq breadth was 22-5 positive.

The dollar index was lower. Treasuries were higher. Gold and crude oil futures were also higher.

Traders eyed a mixed batch of economic data. January business inventories fell 1.1%. February retail sales fell a less than expected 0.1% thanks to high gasoline sales, and actually rose 0.7% excluding autos. Weekly initial jobless claims rose 9,000 to 654,000, while continuing claims rose 193,000 to a record 5,317,000.

Treasury Secretary Timothy Geithner defended the Obama Administration's economic and financial rescue plans in front of the Senate Banking Committee. Geithner said President Obama would cut the deficit in half by 2013.

Shares of GE were 12% higher Thursday as investors took Standard & Poor's Ratings Services downgrade of the conglomerate's credit rating -- from AAA to AA+ -- in stride. In downgrading GE and its GE Capital unit's long-term ratings, S&P Ratings said it believes that GE Capital "is under increasing earnings pressure, due to the recent sharp deterioration in general economic conditions around the globe." S&P said the ratings outlook for GE was stable.

In response, GE said the ratings downgrade does not affect its and GE Capital's short-term funding ratings of A-1+, which was affirmed by S&P. In addition, the company said GE Capital is one of the only financial services companies in the world with a rating as high as AA+. GE said it does not anticipate any significant operational or funding impact from this change.

General Motors (GM) shares were 17% higher on a report the company's CFO has advised the U.S. government's auto industry task force that $2 billion of funding requested for March was not immediately needed. The automaker noted companywide cost cuts have allowed GM to defer an immediate aid request.

Pfizer (PFE) shares jumped 9% after the company announced that a Phase III clinical trial of Sutent has been stopped early after the drug showed significant benefit in patients with advanced pancreatic islet cell tumors, also known as pancreatic neuroendocrine tumors.

In economic news Thursday, U.S. business inventories fell 1.1% in January, and sales declined 1.0%.