NEW YORK - Stocks rose for the third straight session yesterday as oil prices fell sharply and the government reported that the economy grew last quarter at a faster pace than previously estimated.
A rising dollar helped push the price for crude oil down by more than $4 a barrel, the biggest single-session drop since March.
Investors have been concerned recently that rising oil and gasoline prices would dent consumer spending, which accounts for more than two-thirds of U.S. economic activity.
The revised reading of first-quarter gross domestic product helped ease some worries over recession, which is defined by two straight quarters of decreasing GDP. The Commerce Department said the economy grew at an annual rate of 0.9 percent - above the department's earlier estimate of 0.6 percent and the fourth-quarter increase of 0.6 percent.
Meanwhile, MasterCard Inc. said consumers were continuing to reach for plastic. The company's shares jumped to a fresh high after the credit card processor said it still expected to see double-digit growth in net revenue this year. While it said gross dollar growth in the United States was slowing, purchasing is increasing in other parts of the world. MasterCard rose $22.11, or 7.71 percent, to $309.00 after releasing its forecast.
The Dow Jones industrial average rose 52.19, or 0.41 percent, to 12,646.22. The Standard & Poor's 500 index advanced 7.42, or 0.53 percent, to 1,398.26, and the Nasdaq composite index rose 21.62, or 0.87 percent, to 2,508.32.
The dollar rose against other major currencies, while gold prices fell.
Light, sweet crude fell $4.41 to settle at $126.62 on the New York Mercantile Exchange. It was the lowest close in two weeks.
In corporate news, Costco Wholesale Corp. reported that its fiscal third-quarter profit rose 32 percent as customers flocked to its warehouse clubs to find bargains on food and toiletries. The stock fell 26 cents to close at $72.98, however, after Costco warned that Wall Street's forecast for the company's fourth quarter could be too optimistic.
Retailer Sears Holdings Corp. fell $3.22, or 3.60 percent, to $86.14 after posting a $56 million first-quarter loss that was worse than Wall Street forecast. The company said customers allocated more of their budgets to gasoline and food.