Dow Watch: Three-Day Rally Lives

The Dow Jones Industrial Average finished above 7100 thanks to gains in Bank of America, General Electric and General Motors
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Updated from 2:37 p.m. EDT

If the bulls were grateful that the

Dow Jones Industrial Average

didn't falter and give back

Tuesday's rally

yesterday, they should be tickled pink today.

In all,

the Dow climbed 9.5%

over the previous three trading sessions, the longest winning streak since one that ended after Jan. 28 and the biggest since November.

What makes today's 240-point, 3.5% surge particularly remarkable is that Dow futures were down roughly 100 points when compared to fair value at 7 a.m. EDT this morning.

Bank of America

(BAC) - Get Report

,

General Electric

(GE) - Get Report

and

General Motors

(GM) - Get Report

were the big winners of the day following a flurry of news.

Consumer-related names also pieced together a strong session, with

McDonald's

(MCD) - Get Report

,

Procter & Gamble

(PG) - Get Report

,

Home Depot

(HD) - Get Report

and

Wal-Mart

(WMT) - Get Report

finishing with gains.

In addition,

American Express

(AXP) - Get Report

shares overcame a bearish research note from a Citi analyst to post a 10.2% advance for the day.

United Technologies

also overcame a shaky start to the session after CFO Greg Hayes said the company would be more aggressive with mergers and acquisitions this year.

Microsoft

(MSFT) - Get Report

was the only laggard on the Dow, losing 0.6% to finish at $17.01. The stock was pressured by a Morgan Stanley analyst's prediction that PC sales would fall by 11% in 2009 as cheaper, smaller netbooks gain in popularity.

(At 2:37 p.m. EDT)

Apparently I spoke too soon. The

Dow

has now easily topped 7100 and keeps pushing higher.

The Dow's three-day rally is now good for 8.6%, as the bulls have seized control. Market observers still debate whether this is a bear market rally or the turning point, but the bulls will certainly pocket this rally with a smile.

Bank of America

(BAC) - Get Report

,

General Electric

(GE) - Get Report

and

General Motors

(GM) - Get Report

are still the leaders on the Dow, all trading more than 10% higher.

Pfizer

(PFE) - Get Report

is also a big gainer thanks to the positive trial news on its cancer drug Sutent. Rival

Merck

(MRK) - Get Report

is also rallying alongside Pfizer.

Microsoft

(MSFT) - Get Report

is now the only laggard on the Dow as

Boeing

(BA) - Get Report

has turned positive, at least for the moment.

(At 1:25 p.m. EDT)

Dow

7100? Maybe not today, but we're close. The U.S. index is now 150 points higher, good for an advance of 2%.

If the Dow can hold onto its gains, it would be the first three-day winning streak since the end of January and the highest close since Feb. 26. There are still nearly 3 hours left in trading, so anything can happen.

Bank of America

(BAC) - Get Report

is now the third Dow component to sport a double-digit percentage gain, lately up 11%. BofA received a strong boost after CEO Ken Lewis told a business group in Boston that the bank should earn "close to $50 billion in pre-tax, pre-provision earnings" in 2009 and that his doesn't expect his bank to need more government capital.

General Electric

(GE) - Get Report

and

General Motors

(GM) - Get Report

continue to be the strongest performers of the day. In addition,

American Express

(AXP) - Get Report

turned positive.

In fact, many Dow members have reversed ground and are now in the black. Only two components are trading lower:

Microsoft

(MSFT) - Get Report

and

Boeing

(BA) - Get Report

.

(At 11:36 a.m. EDT)

It's not a convincing move above 7,000 for the

Dow

, but bulls will take it, for sure.

The Dow jumped more than 100 points to a high of 7,047 but has once again retreated closer to the 7,000 mark.

General Electric

(GE) - Get Report

is still among the biggest gainers, jumping 11% after the

downgrade by Standard & Poor's

.

General Motors

(GM) - Get Report

joined in on the rally, surging 13% after the automaker's chief financial officer said the company will not need the $2 billion loan installment for March that it requested from the U.S. government last month.

Winners were outpacing losers 23 to 7 at midsession, with

American Express

(AXP) - Get Report

and

Alcoa

(AA) - Get Report

still trading lower.

(At 10:34 a.m. EDT)

Hopes for a three-day rally on

the Dow Jones Industrial Average

are still alive now that the index has turned positive, lately trading 55 points higher.

Still, the Dow seems to be facing some resistance at the 7,000 threshold. Regaining that level, while still 50% below the average's all-time highs, may help bolster investor sentiment.

Pfizer

(PFE) - Get Report

and

General Electric

(GE) - Get Report

continue to lead advancers on the Dow. Both

JPMorgan Chase

(JPM) - Get Report

and

Bank of America

(BAC) - Get Report

were also trading higher.

Meanwhile,

American Express

(AXP) - Get Report

was among the biggest decliners after a Citi analyst published a research report that said credit losses will likely force the company to take sizable reserves in the coming quarters and potentially cut its dividend. Shares were lately down 2.6%.

Also among the Dow's losers were

Alcoa

(AA) - Get Report

and

Microsoft

(MSFT) - Get Report

, both losing 2.4%.

(At 9:36 a.m. EDT)

The

Dow Jones Industrial Average's

two-day winning streak, the first in more than a month, looks to be in jeopardy as the index opened points lower Thursday.

Earlier, Dow futures bounced from their worst levels of the morning with help from

Pfizer

(PFE) - Get Report

and

General Electric

(GE) - Get Report

, both of which were trading higher in the premarket session.

Pfizer said that a Phase 3 clinical trial of cancer drug Sutent has been stopped early after the drug showed a "significant benefit" in patients with advanced pancreatic islet cell tumors. Pfizer said that all patients in the trial will have the option to continue taking Sutent or be switched from placebo to Sutent.

Shares of Pfizer were set to open 3.3% higher at $13.21.

Meanwhile, GE shares traded higher even after Standard & Poor's downgraded GE's and GE Capital's long-term ratings from AAA to AA+, with a "stable" outlook. In response, GE said it does not anticipate any significant operational or funding impacts from this change.

GE shares were up 4.2% in early trading to $8.85.