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Stocks Close Up Sharply On Economy, Banks
CNBC.com | March 13, 2012 | 04:41 PM EDT

Stocks closed sharply higher Tuesday, pushing the major averages to multi-year highs, on news of a stronger US economy and recovering banking sector.

The Dow Jones Industrials closed above 13,000, while the Nasdaq finished above 3,000, the first time both have reached that level at the same time.

It was also the first time the Nasdaq had closed above 3,000 in 12 years.

The rally picked up speed in the final hour after JPMorgan Chase became the first bank to boost its dividend following the Federal Reserve's latest stress tests .

JPMorgan Chase soared in reaction, while other bank stocks rose further.

Chase's announcement came two days before the Fed planned to publicly announce results of their stress tests of bank capital levels. That forced the Fed to release the results today at 4:30 pm ET instead. The report showed four of 19 banks had failed. (Click here for the latest on stress tests).

The rally was sparked initially as retail sales exceeded expectations and concerns eased about Europe's debt crisis.

Stocks maintained their gains after the Fed announced mid-afternoon that it will hold steady on monetary policy while acknowledging a mildly brighter economic outlook.

Ending a one-day policy meeting, the Fed said recent financial market strains have eased while offering few clues on the chances for further monetary easing.

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