NEW YORK (CNNMoney.com) -- Stocks jumped Thursday, gaining for the third session in a row, as investors scooped up banks and other shares hit in a selloff that left the Dow at 12-year lows.

The Dow Jones industrial average (INDU) gained 240 points, or 3.5%, managing a three days of back-to-back gains for the first time since late January.

The S&P 500 (SPX) index gained 29 points, or 4%. The Nasdaq composite (COMP) gained 54 points, or 4%.

Although it's too soon to tell where stocks are going to go from here, the rally off the lows is nonetheless encouraging, said Dan Genter, president and CEO at RNC Genter Capital Management.

"The market is showing us that if we get to radically oversold positions and things get really irrational, there is money out there that people are willing to put to work," he said.

The major gauges have been on the rise since the Dow and S&P 500 ended Monday at 12-year lows. Bets that regulators may reinstate a rule that limits short selling and talk that a key accounting rule could be suspended or at least modified helped pace the advance.

"We were very oversold through Monday and the market was looking for any kind of excuse to put on a rally," said Mike Stanfield, CEO of VSR Financial Services. "The question is: Will this be the kind of short-term bounce we've seen since the election or will it be something more substantive?"

Stanfield said it all depends on the behavior of the financial sector.

"The market will never get its footing until the financials make a low and hold it," he said. "The market can't be healthy without a healthy financial system."

Congress held a hearing Thursday on mark-to-market accounting. Critics say the accounting rule has hurt the bank sector by forcing companies to write down bad assets at fire-sale prices. Supporters say it provides a clear picture of the assets banks are holding. (Full story)

Bernard Madoff: The architect of a multi-billion dollar Ponzi scheme was sent to jail to await sentencing after pleading guilty to 11 charges for one of the biggest swindles in Wall Street history. (Full story)

GE and GM: Standard & Poor's downgraded GE and GE Capital's long-term credit ratings to AA+ from AAA, with a "stable" outlook. But Wall Street had been speculating that one of the major ratings agencies might issue a downgrade, and the stock had already slumped in anticipation of an announcement. GE shares rallied 12.7% Thursday.

General Motors (GM, Fortune 500) said it won't have to take $2 billion in additional federal loans this month because its cost-cutting efforts have improved its cash position. The stock jumped more than 17%.

Financials: Bank stocks were mostly higher, with Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500), Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) all rising. The KBW Bank (BKW) sector index rose around 11%.

The bank sector drove a bigger stock market advance Tuesday after regulators said they may reinstate the "uptick rule" that stops short sellers from driving a floundering stock lower. Critics say the absence of the rule has played a role in the steep selloff of bank stocks this year.

Stocks also got a boost Tuesday after Citigroup (C, Fortune 500) cooled some worries about its future by saying it was profitable in the first two months of the year.

In other financial news, mortgage lender Freddie Mac, now under federal conservatorship, reported its sixth straight quarterly loss late Wednesday and asked the government for another $30.8 billion. Shares were little changed.

Drugmakers: Swiss company Roche Holding said it's buying the remaining 44% of U.S. biotech Genentech it doesn't already own. The $46.8 billion deal ends an almost 8-month battle in which Genentech (DNA) repeatedly spurned Roche's offer. Genentech shares gained 2%.

Biotech Gilead Sciences (GILD) said it will buy drugmaker CV Therapeutics (CVTX) for $1.4 billion. CV shares jumped 31.5%, while Gilead shares were little changed.

Pfizer (PFE, Fortune 500) said that a late-stage clinical trial of its cancer drug Sutent has been stopped early after the drug produced a significant benefit in patients with a rare form of cancer. Shares of the Dow component jumped 7.5%.

Market breadth was positive. On the New York Stock Exchange, winners topped losers by over ten to one on volume of 1.81 billion shares. On the Nasdaq, advancers beat decliners by over 4 to 1 on volume of 2.42 billion shares.

Economy: February retail sales fell 0.1% after falling a revised 1.8% the previous month, the Commerce Department reported Thursday. Sales were expected to have fallen 0.5%, according to a consensus of economists surveyed by Briefing.com.

Sales excluding volatile autos rose 0.7% versus a revised 1.6% in January. Economists thought sales would fall 0.1%.

Another government report showed that the number of Americans filing new claims for unemployment last week rose to 654,000 from a revised 645,000 the previous week. The number of Americans continuing to receive benefits rose to a record 5.3 million.

A third government report showed that household net worth, the difference between assets and liabilities, fell by $11.2 trillion last year.

Friday brings reports on the January trade balance, February import and export prices and the initial March consumer sentiment index from the University of Michigan.

Bonds: Treasury prices gained, lowering the yield on the benchmark 10-year note to 2.85% from 2.9% Wednesday. Treasury prices and yields move in opposite directions.

Lending rates were little changed. The 3-month Libor rate eased to 1.32% from 1.33%, while the overnight Libor rate held at 0.33%, according to Bloomberg.com. Libor is a bank-to-bank lending rate.

Other markets: In global trading, most Asian and European markets ended higher.

In currency trading, the dollar fell versus the euro and gained against the yen.

U.S. light crude oil for April delivery settled up $4.70 to $45.27 a barrel on the New York Mercantile Exchange, a gain of over 11%.

COMEX gold for April delivery rose $13.30 to settle at $924 an ounce. 

NEW YORK (CNNMoney.com) -- After its first two-day winning streak in five weeks, Wall Street may have trouble getting that third gain in a row Thursday.

At 4:40 a.m. ET, Nasdaq-100, Standard & Poor's 500 and Dow Jones industrial average futures were all lower.

The major indexes all climbed Wednesday, although the Dow and S&P just barely made it into the positive territory. Techs led the advance, with the Nasdaq gaining 1%. It was the first time there had been two straight positive days since early February.

Economy: The government reports on retail sales for February before the markets open. Economists surveyed by Briefing.com expect a 0.5% decline after a surprise 1% gain in January. Excluding the dismal auto sector, retail sales are seen dropping 0.1%.

Also before the open will be the government's weekly report on initial unemployment filings. Economists expect claims to have risen to 644,000 from 639,000 the week before.

Foreclosures increased to 74,000 in February from 67,000 the month before, according to a report from RealtyTrac, an online marketer of foreclosed properties.

Companies: Freddie Mac, the home mortgage backer now under federal conservatorship, reported late Wednesday that it lost $23.9 billion in the fourth quarter due to rising credit losses and derivative writedowns. The company asked the government for an additional $30.8 billion in aid to help stabilize the housing market.

After a lengthy fight, the Swiss drug maker Roche announced early Thursday that it is buying the stake in U.S. biotech developer Genentech (DNA) that it doesn't already own for $46.8 billion.

Other markets: Asian stocks ended mixed, with Tokyo's Nikkei index down 2.4% but Hong Kong's Hang Seng showing a modest gain. European markets were lower in early trading.

Oil rose 35 cents to $42.68 a barrel. The dollar was lower against the yen and euro

NEW YORK (CNNMoney.com) -- Stocks were poised to open higher Wednesday, continuing the momentum from a massive rally in the previous session.

At 8:26 a.m. ET, the Dow Jones industrial average, S&P 500 and Nasdaq futures were higher, though they backed off from stronger gains earlier in the morning.

Futures measure current index values against the perceived future performance. They are typically used as a forecast for how trading will start, though they're not always accurate.

On Tuesday, stocks surged after a Citigroup (C, Fortune 500) memo said the beleaguered bank was profitable in January and February, and amid talk that the government may reinstate a restriction on short-selling. The Dow rallied 379 points, the biggest gain of 2009, a day after finishing at a 12-year low.

Art Hogan, chief market strategist at Jefferies & Co., said it would be no surprise if the stock markets could maintain a second day of gains, considering their oversold position after three weeks of declines.

"I certainly thing it's a positive, but we've got a long way before we can call it a trend," said Hogan.

But he added that the makings of a trend are there. "There is a creeping sense that there is stability coming back into the markets, albeit at extremely stressed levels," he said.

Robert Brusca, chief economist at Fact and Opinion Economics, said Wednesday's gain in the futures markets "increases the credibility of yesterday's rally" and he believes that the markets have hit their bottom.

"My hypothesis is that this is the beginning of a [prolonged] rally, because the market is oversold," said Brusca, who hopes that traders and economists will shed their "amazing and relentless pessimism."

But Len Blum, managing director at the investment bank Westwood Capital LLC, was more cautious in his assessment of the markets.

"Fear is prevalent enough that you're not going to get a sustained rally unless there's some clear evidence that banks are again willing to lend, that troubled assets are under control, and that there's a bottom to the real estate market," said Blum.

Asian markets joined the rally Wednesday, with Tokyo's Nikkei surging 4.6% to bounce off a 26-year low. In morning trading, the European indexes were mostly higher, with the FTSE index in London slipping by less than 1%.

Economy: The February Treasury budget will be released at 2 p.m. ET. A deficit of $205 billion is expected, according to a consensus of analyst opinions from Briefing.com.

The government's weekly crude inventories report comes out at 10:30 a.m. ET. Analysts expect a drawdown of 1 million barrels in U.S. commercial crude oil stocks, according to a survey by energy research firm Platts.

In Washington, the congressional oversight panel is due to release a report on the Troubled Asset Relief Program (TARP), the bank bailout plan.

Oil and money: Oil fell 68 cents a barrel to $45.03. The dollar slipped versus the euro, the yen and the British pound. 

At 4:35 a.m. ET, the Dow Jones industrial average, S&P 500 and Nasdaq futures were higher with a comparison to fair value.

Futures measure current index values against the perceived future performance, and can be used as a forecast for market activity beyond the opening bell.

On Monday, stocks fell as the continued global slide overpowered positive developments, including a $41 billion merger agreement between the drugmakers Merck & Co. (MRK, Fortune 500) and Schering-Plough Corp. (SGP, Fortune 500)

The Asian markets closed mixed, with Tokyo's Nikkei index down 0.4% to a new 26-year low, but Hong Kong's Hang Seng index rallied 3%. The European indexes were also mixed in early trading.

The economy: Federal Reserve chairman Bernanke is scheduled to speak in Washington before the markets open. The topic is reform to address financial system risk.

The January wholesale inventories report comes out shortly after the market opens. Inventories are expected to have fallen 1% in January, according to a consensus of economist opinions compiled by Briefing.com. This is compared to a decline of 1.4% in the prior month.

Companies: Grocery store chain Kroger (KR, Fortune 500) will report earnings before the bell. The company is expected to report a 7% gain in fourth-quarter earnings, to 52 cents per share, according to a consensus of analyst opinions compiled by Thomson Reuters.

Money and oil: Oil prices gained 11 cents to $47.18 a barrel. The dollar slipped versus the euro and the yen. 

NEW YORK (CNNMoney.com) -- U.S. stocks were set to open lower Monday, as the global economic crisis continued to cast a pall on world markets.

At 4:35 a.m. ET, Nasdaq-100, Standard & Poor's 500 and Dow Jones industrial average futures were all lower.

U.S. stocks were down overall last week, although the Dow and S&P managed modest gains Friday that took them off 12-year lows.

The beleagured banking sector will be in focus again Monday. Over the weekend, published reports - including one from Fortune - named some of the global banks that have been beneficiaries of the government bailout of insurer American International Group (AIG, Fortune 500).

Among the counterparties to billions in credit default swaps named: Goldman Sachs (GS, Fortune 500), Bank of America (BAC, Fortune 500) and Wachovia, which has been taken over by Wells Fargo (WFC, Fortune 500).

Asian stocks finished down, with Tokyo's Nikkei index ending at a 26-year low after a 1.2% decline. European stocks were mostly lower in early trading.

Oil gained 80 cents to $46.32 a barrel in electronic trading. The dollar gained against the euro and was little changed versus the yen.