Wall Street rises on energy, spending optimism

NEW YORK (Reuters) - Stocks rose for a third straight day on Thursday as surging oil prices lifted energy shares, while a reassuring report on February retail sales suggested some stabilization in consumer spending.

Even so, caution about the labor market kept gains in check as weekly jobless claims data showed a record high number of workers drawing state jobless benefits.

U.S. front-month crude oil climbed more than 4 percent to $44.18 a barrel, while Exxon Mobil Corp shares climbed 1.3 percent to $66.64.

Wal-Mart Stores Inc rose 1.1 percent to $47.98 following a government report that showed sales at U.S. retailers fell by an unexpectedly small margin in February.

"The economic numbers are OK, the retail sales were good, so trends, I think, are improving," said Anthony Conroy, head trader for BNY ConvergEx, an affiliate of the Bank of New York

in New York.

"If trends continue to improve, the employment losses should become less severe. It supports the case for a modest rally into the quarter-end."

The Dow Jones industrial average jumped 70.56 points, or 1.02 percent, to 7,000.96. The Standard & Poor's 500 Index climbed 8.71 points, or 1.21 percent, to 730.07. The Nasdaq Composite Index gained 7.62 points, or 0.56 percent, to 1,379.26.

Shares of General Electric , a Dow component, jumped more than 11 percent to $9.46 after Standard & Poor's assigned the conglomerate a stable outlook even after stripping it of its top-tier triple-A credit rating. The rating was lowered by one notch to AA-plus.

A higher finish on Thursday would round off the S&P 500's first 3-day run-up in more than a month after the market hit 12-year lows on investor gloom over the recession.

On Nasdaq, shares of biotechnology companies were a top boost as news of a takeover in the sector buoyed sentiment.

Gilead Sciences Inc said it has stepped in to buy CV Therapeutics Inc for about $1.4 billion. Gilead shares fell 1.7 percent to $43.29, while CV's shares shot up more than 28 percent to $20.57.

(Editing by James Dalgleish)