U.S. stocks rose in a broad rally on Thursday, bouncing back from two days of losses, helped by weaker retail sales that paused the dollar's recent rally and tempered the outlook for interest rates.

The day's gains lifted the Dow and S&P 500 back into positive territory for the year so far.

Banking shares rallied following the Federal Reserve's annual check-up on the industry's health. The S&P financial sector .SPSY rose 2.2 percent and was the day's biggest gainer. A weak outlook from Intel, however, limited gains in the tech sector.

Retail sales unexpectedly dropped for a third month in February, which helped the euro rebound from a 12-year low versus the dollar. Recent weakness in stocks has largely been driven by Friday's stronger-than-expected jobs data, which underscored views the Fed could raise rates as early as June.

"To me, it shows maybe that moving the rate increase closer has potential fallout with regard to the ever-stronger U.S. dollar, and that's a headwind for growth and a headwind for earnings for a lot of companies that do business outside the U.S.," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

The Dow Jones industrial average .DJI rose 259.83 points, or 1.47 percent, to 17,895.22, while the S&P 500 .SPX gained 25.71 points, or 1.26 percent, to 2,065.95. The day's percentage gains were the biggest for both the Dow and S&P 500 in about a month.

The Nasdaq Composite .IXIC added 43.35 points, or 0.89 percent, to 4,893.29.

The rally represented just a partial rebound after a recent bout of weakness, which has left the S&P 500 down 2.4 percent from its March 2 record closing high.

Citigroup (C.N) passed in the Fed review, allowing it to raise dividends and sending shares up 3.3 percent to $54.08. Bank of America (BAC.N) was told to get a better grip on internal controls and its data models; shares slipped 0.1 percent to $16.09.

Intel Corp (INTC.O) slashed its first-quarter revenue forecast, citing lower-than-expected demand for business PCs and lower inventory levels across the PC supply chain. Shares of the Dow component fell 4.7 percent to $30.80 and limited the Nasdaq's advance.

Shares of Walt Disney Co (DIS.N) rose 4.2 percent to $107.17 and were the biggest percentage gainer in the Dow after it said it has started work on a sequel to "Frozen," the best-selling animated movie of all time. Shares of Mattel (MAT.O) gained 4.2 percent to $25.65.

Advancing issues outnumbered declining ones on the NYSE by 2,241 to 823, for a 2.72-to-1 ratio; on the Nasdaq, 1,982 issues rose and 765 fell, a 2.59-to-1 ratio.

The S&P 500 index posted 22 new 52-week highs and 8 new lows; the Nasdaq Composite recorded 136 new highs and 73 new lows.

About 6.5 billion shares changed hands on U.S. exchanges, compared with the 6.6 billion average for the month to date, according to data from BATS Global Markets.