Stocks rose for a third straight session Thursday as oil prices took a tumble and the government reported that the economy grew last quarter at a faster pace than previously estimated.
A rising dollar helped push crude oil prices down by more than $4 per barrel, the biggest single-session drop since March.
Investors have been concerned recently that rising oil and gasoline prices are restraining consumer spending, which accounts for about two-thirds of U.S. economic activity.
The revised reading of first-quarter gross domestic product helped ease some worries about a possible recession, which is traditionally defined by two straight quarters of decreasing GDP. The Commerce Department said the economy grew at an annual rate of 0.9% in the quarter after expanding at a 0.6% rate in the last three months of 2007.
The first-quarter figure was revised up from the department's initial estimate of 0.6% growth.
Meanwhile, credit card giant MasterCard, saying consumers were continuing to reach into their wallets for plastic, maintained its prediction of double-digit growth in net revenue this year. Although growth in its U.S. business is slowing, purchases on its cards are increasing in other parts of the world. Some economists have argued that the U.S. economy could avoid a serious downturn if consumer spending avoids a big falloff in this country and remains strong elsewhere.
Shares of MasterCard jumped $22.11, or 7.7%, to $309.
The signs Thursday of resilience in the U.S. economy appeared welcome.
"The GDP news was pretty good. From our perspective, we're not going to see a negative quarter of GDP, so earnings are going to improve," said Scott Wren, senior equity strategist for Wachovia Securities.
The Dow Jones industrial average rose 52.19 points, or 0.4%, to 12,646.22. The index was up nearly 133 points at its high of the session.
Broader stock indicators also gained. The Standard & Poor's 500 index advanced 7.42 points, or 0.5%, to 1,398.26, and the Nasdaq composite index jumped 21.62 points, or 0.9%, to 2,508.32.
The Russell 2,000 index of smaller companies climbed 7.09 points, or 1%, to 745.55.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange.
Stocks could be helped today by a report from Dell, which posted stronger-than-expected fiscal first-quarter earnings and revenue after the closing bell Thursday. Its stock rose more than 9% in after-hours electronic trading.
