US stocks rally as dollar dips; Dow +1.47%

Wall Street stocks Thursday snapped a two-day losing streak, surging after big US banks cleared Federal Reserve stress tests and the dollar retreated from a 12-year high.

The Dow Jones Industrial Average surged 259.83 points (1.47 percent) to 17,895.22.

The broad-based S&P 500 jumped 25.71 (1.26 percent) to 2,065.95, while the tech-rich Nasdaq Composite Index rose 43.35 (0.89 percent) to 4,893.29.

Dow members JPMorgan Chase and Goldman Sachs and other large banks rose strongly after the Fed's stress-test review gave the green light for dividend increases and share repurchases.

The dollar retreated modestly after hitting a 12-year high on Wednesday. Despite the easing, equity investors are still worried a strong greenback will dent US exports, said Mace Blicksilver, director of Marblehead Asset Management.

"Enjoy the rally why it's here... but I don't think we're going to see new highs any time soon," he said.

Dow member United Technologies advanced 2.5 percent on news it is considering a possible tax-free spinoff of its Sikorsky Aircraft business.

Intel, another Dow member, fell 4.7 percent after slashing its first-quarter revenue outlook due to weaker-than-expected demand for business desktop personal computers.

Microsoft, another Dow member tied to the PC business, fell 2.3 percent.

Other technology companies posted strong gains, including Apple (+1.8 percent) and online retailer Amazon (+2.2 percent).

Dow member Disney climbed 4.2 percent after saying it plans a sequel to the wildly popular "Frozen" animated movie.

Acadia Pharmaceuticals plummeted 22.2 percent after announcing it was expanding the timeframe of its new drug application for Nuplazid, a treatment for Parkinson's disease psychosis, from the current first quarter to the second half of 2015.

Acadia also announced that Uli Hacksell had esigned as chief executive and would be replaced by interim chief Steve Davis, the company's chief financial officer.

Bond prices were mixed. The yield on the 10-year US Treasury held steady at 2.11 percent, while the 30-year rose to 2.69 percent from 2.68 percent Wednesday. Bond prices and yields move inversely.