NEW YORK (TheStreet) -- Stocks rallied after two straight days of losses, led by the financial sector and a rebound in oil prices. 

The S&P 500 was up 0.8%, the Dow Jones Industrial Average climbed 0.93%, and the Nasdaq added 0.41%.

Major U.S. banks were higher after passing round two of the Federal Reserve's stress tests largely unscathed. Citigroup (C) - Get Report and Morgan Stanley (MS) - Get Report were among the biggest winners after reporting better-than-forecast buyback programs. Gains at Bank of America (BAC) - Get Report were limited after the bank was told to resubmit its capital plan.

The Select Sector Financial SPDR ETF  (XLF) - Get Report jumped 1.2%. 

Oil prices resumed their slide despite a reprieve in the U.S. dollar's two-day rally that sent it to 12-year highs against other currencies. West Texas Intermediate was down 0.75% to $47.81 a barrel. The greenback slipped 0.77% against the euro, 0.15% against the British pound, 1.6% against the Aussie dollar, and 0.81% against the Swiss franc. 

"Oil continues to exhibit the traits of a 'helium balloon' market," said Matt Smith, commodity analyst at Schneider Electric. "Left to its own devices there is a natural desire for it to gravitate higher, while intermittent tugs from bearish fundamental data bring it back to reality and keep it grounded."

Lumber Liquidators (LL) - Get Report resumed trading after being halted during a conference call to address product safety issues. Shares jumped 10.3% after CEO Rob Lynch assured investors the company's products were safe, despite a damning report from 60 Minutes earlier in the month.

U.S. retail sales slumped 0.6% in February after a 0.8% drop a month earlier and a 0.9% decrease in December. Economists had expected a 0.3% increase as savings in gas prices translated to higher consumer spending. Core retail sales, excluding auto and gas, dropped 0.8%.

"While disappointing, much of the weakness in February retail sales likely reflected the effect of extreme winter weather that may have kept shoppers at home in the month," said RBC Economics economist Nathan Janzen. If "this is the case, the slowing reflects delayed rather than lost sales, with a likely rebound in March provided that temperatures warm closer to seasonal normals."

Jobless claims fell 36,000 to 289,000 in the week ended March 7, according to the Labor Department. Economists had expected new claims for unemployment benefits to fall to 310,000 from 325,000 a week earlier.

Markets have been pressured for much of the week as investors process the likelihood the Federal Reserve will raise rates sooner than later. Wall Street is preparing for the Fed to remove its "patient" language from its release in a two-day meeting next Tuesday, a signal that could mean a mid-summer rate hike.

Intel (INTC) - Get Report was dragging on the Dow after first-quarter revenue guidance was slashed to $12.3 billion to $13.3 billion, below previous forecasts of $13.2 billion to $14.2 billion. The chip company cited "weaker-than-expected demand for business desktop PCs." Shares were down 4%. 

Partially offsetting Intel's decline, Dow component United Technologiesundefined spiked 1.7%. The aerospace company is considering splitting off its Sikorsky Aircraft helicopter unit, TheWall Street Journal reported. The unit had 2014 revenue of $6.6 billion.

Dollar General (DG) - Get Report added 2.9% after meeting fourth-quarter expectations. Same-store sales jumped 4.9% over the quarter. Full-year sales growth was expected to increase 8% to 9% with EPS growth of 10% to 13%.

Alibaba (BABA) - Get Report has reportedly invested $200 million in Snapchat, the photo-messaging app, according to Reuters. Alibaba shares were up 0.8%.

Acadia Pharmaceuticals (ACAD) - Get Report tanked 21.6% after announcing it will postpone its Nuplazid drug application to the second half of the year. The company had previously expected to file for the Parkinson's disease drug in the first quarter.

Shake Shack (SHAK) - Get Report plummeted nearly 7% after delivering its first post-IPO earnings report. Though its quarterly net loss was narrower than expected, the chain's growth expectations disappointed investors' high hopes.

European markets were mixed after eurozone industrial production slipped 0.1% in January, lower than a forecast 0.2% increase. After a rally Wednesday, Germany's DAX and France's CAC 40 took a turn lower, though the FTSE 100 in London spiked as mining companies including Rio Tinto (RIO) - Get Report rebounded.

Ukraine received a lifeline from the International Monetary Fund with officials giving the war-ravaged nation access to $5 billion of $17.5 billion in emergency funding. However, the central body cut Ukraine's economic forecast, expecting it to contract 5.5% in 2015 from previous forecasts of 1% growth.