Stocks rose for a third day on Thursday after Standard & Poor's cut General Electric's credit rating by just one notch below AAA and signaled no further downgrades loomed while data suggested some stabilization in consumer spending.

Sentiment was also lifted by news of a takeover in the biotechnology sector and the S&P health-care sector index <.GSPA> rose about 4 percent.

The Dow Jones industrial average <.DJI> rose 122.89 points, or 1.77 percent, to 7,053.29, near its session high. The Standard & Poor's 500 Index <.SPX> added 14.02 points, or 1.94 percent, to 735.38. The Nasdaq Composite Index <.IXIC> gained 22.43 points, or 1.64 percent, to 1,394.07.

(Reporting by Deepa Seetharaman; Editing by Jan Paschal)

Investment General electric