Stocks Record Biggest Gains of Year; Dow Up 218 NEW YORK - Bank stocks turbocharged what was already a big market rally Tuesday, and all three major stock indexes posted their biggest gains of the year. The Dow Jones industrial average rose 218 points and closed at its highest level since the end of 2007. The Nasdaq composite closed above 3,000 for the first time since December 2000. Stocks climbed from the opening bell after the government said February retail sales gains were the strongest since September. Then JPMorgan Chase, the country's largest bank by assets, announced that it plans to buy back as much as $15 billion of its stock and raise its quarterly dividend to 30 cents per share from 25 cents a share. The announcement sent other bank stocks higher. JPMorgan Chase gained 7 percent. Citigroup and Goldman Sachs gained 6 percent. MORE: Dollar Shave Club: A Start-Up's Viral Ad for "F***ing Great" Razors Is a Big Hit Major indexes added to their gains after the Federal Reserve said it saw signs of an improving economy. The Fed noted that the unemployment rate has declined and should keep falling. It also said strains in the global financial markets have eased. The Dow finished at 13,177.68, its highest close since Dec. 31, 2007. The close put the Dow within 1,000 points of its all-time record, 14,164, set less than three months earlier, Oct. 9, 2007. The Nasdaq composite index rose 56.22 points Tuesday, or 1.9 percent, to 3,039.88, its first close above 3,000 since months after the bubble in dot-com stocks burst. Jack Ablin, chief investment officer at Harris Private Bank, said the key difference between the Nasdaq then and now is that the technology companies that dominate the index only promised profits 12 years ago. Today, the Nasdaq's largest companies are Apple, Microsoft and Google, corporate titans with massive earnings. MORE: Job Numbers and Economics of Emotion "The Nasdaq hasn't done much of anything for 12 years, but it's had a huge rally in earnings," Ablin said. The Commerce Department said retail sales rose 1.1 percent last month, the biggest gain since September. Some of the gain reflected higher gas prices, but consumers also bought more cars, clothes and appliances. Department stores had their biggest gains in more than a year. The government also revised its estimates higher for December and January. The Standard & Poor's 500 index rose 24.87 points, or 1.8 percent, to 1,395.96. The S&P 500, a broad measure of the stock market, has already gained 11 percent this year, more than its average for a full calendar year. Brian Gendreau, market strategist at Cetera Financial, said stocks could still go higher. Investors are paying roughly 13 times the past year's earnings for the S&P 500 index. The long-term average is closer to 15. "Valuations are still very cheap," he said. A reading of confidence among small business owners also rose in February for the sixth month in a row. The National Federation of Independent Business optimism index reached its highest level in a year, helped by an increase in expected sales. Among companies making big moves: Great Wolf Resorts jumped 27 percent to $5.13. Apollo Global Management said it has agreed to buy the indoor water park operator for $5 a share. Urban Outfitters dropped 5.3 percent, the worst drop in the S&P 500 index. The retailer reported earnings that fell below what analysts were expecting after it had to mark down prices on women's clothing at its Anthropologie and Urban Outfitters stores. Carmike Cinemas soared 17 percent. The Georgia-based movie theater chain reported earnings and sales that far outpaced what Wall Street analysts had expected.