March 6 (Bloomberg) -- U.S. stocks rose, led by banks and energy shares, as forecasts that General Electric Co. has enough capital and oil’s surge sent the Dow Jones Industrial Average up more than 150 points in the final 35 minutes of trading.

GE jumped 6 percent, halting a five-day retreat, as analysts at Sanford C. Bernstein & Co. and Merrill Lynch & Co. said the finance unit has adequate funding. Chevron Corp. and Exxon Mobil Corp. advanced 2.9 percent as oil reached $46.30 a barrel. The Dow erased a 124-point drop that followed a morning rally spurred by a slower rate of job cuts in February.

“Every day you come in and get beaten down,” said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages $2 billion in San Antonio. “It’s just been brutal. The fact that we ended on a positive note, I’ll take it.”

The Dow average increased 32.50 points, or 0.5 percent, to 6,626.94 at 4 p.m. in New York after sinking as low as 6,469.95. The Standard & Poor’s 500 Index added 0.1 percent to 683.38, rebounding from a 2.3 percent decline.

For the week, the Dow average lost 6.2 percent, matching its worst retreat since October, while the S&P 500’s 7 percent drop was the steepest in 14 weeks. GE slid 17 percent on concern losses are growing at its finance unit, which makes up about 37 percent of its revenue, according to data compiled by Bloomberg.

Both gauges fell to 12-year lows yesterday, extending a rout that has erased more than $10 trillion from U.S. equity markets over 17 months. Speculation banks face credit downgrades and China won’t add to stimulus measures pushed stocks lower for a fourth week.

Two 150-Point Rallies

The Dow average twice rallied more than 150 points within an hour today. A government report showing U.S. employers cut fewer jobs last month than in January spurred a 160-point rally just after the open before a lower sales forecast for Apple Inc. erased the gain. The average rebounded again prior to the close after oil climbed more than $2 in the final hour of pit trading.

“You finally got the sentiment so negative, we are so massively oversold and people are so fearful,” said Craig Hester, who oversees $1.1 billion as chief investment officer of Hester Capital Management. “We are just getting a rebound off massive losses.”

GE jumped 6 percent to $7.06. The company had plunged 59 percent in 2009.

The S&P 500 Energy Index advanced 1.5 percent, the most among 10 industries. It had retreated as much as 1.9 percent before rebounding with oil late in the day. Chevron rose 3.2 percent to $58.27. Exxon added 2.9 percent to $64.03.

Plateau?

The S&P 500 surged 2.4 percent at 9:45 a.m. in New York, 15 minutes into the trading session, after the Labor Department’s report showed American employers eliminated 651,000 jobs in February, down from a revised 655,000 in January and compared with the median economist estimate of 650,000.

“Maybe we’re starting to get to where we’re at the high point of unemployment, and maybe we plateau from here,” said Jason Cooper, who helps manage $3 billion at 1st Source Investment Advisors in South Bend, Indiana.

Following the morning peak, the S&P 500 fell to a 12-year intraday low of 666.79 at 3:25 p.m. Technology shares led the retreat after JPMorgan Chase & Co. cut its estimates for Apple.

Apple ended the day at $85.30, down 4 percent. JPMorgan reduced forecasts for iPhone and Macintosh-computer sales, citing the “deepening global downturn.”

“Tech stocks, like all other companies, will be affected as the macro environment in the U.S. continues to deteriorate,” London-based MF Global Securities Ltd. analyst Per Lindberg said.

The S&P 500 Financials Index fell 1.4 percent to the lowest level since April 1992. Hartford Financial Services Group Inc. fell 12 percent to $3.62. Goldman Sachs Group Inc. retreated 7.4 percent to $75.65.

ProLogis, the world’s biggest warehouse company, led a decline in real-estate investment trusts after S&P lowered the credit ratings of two REITs and said it may lower eight more. ProLogis fell 8.3 percent to $5.52. Simon Property Group Inc. lost 5.7 percent to $26.19.

To contact the reporters on this story: Cristina Alesci in New York at calesci2@bloomberg.net; Rita Nazareth in New York at nazareth@bloomberg.net.

Last Updated: March 6, 2009 17:11 EST