(Updates to afternoon, changes byline)
*Market rallies on lower oil, higher GDP
*Financials get a boost from MasterCard
*Strong earnings help retailers
By Jennifer Coogan
NEW YORK, May 29 (Reuters) - U.S. stocks rallied on
Thursday as a $4 drop in oil soothed inflation fears, while an
upward revision in a broad measure of U.S. economic growth
suggested a recession may be avoided.
MasterCard shares <MA.N> were among the top gainers after
the credit and debit card processor said it expects
double-digit net revenue growth for 2008 and lifted its
long-term profit outlook For details, see [].
Financial companies, which have have suffered some of the
biggest losses this year, became top performers after the
government revised up the rise in first-quarter gross domestic
product.
"We're in a trading range because there's a fight going on
between people who think we're in a recession and those who
believe we're half-way out of this slow period," said John
Massey, portfolio manager at AIG SunAmerica Asset Management in
Jersey City, New Jersey.
The GDP data supported the latter camp and is helping "the
early recovery cyclicals, like financials and consumer
discretionary," Massey said.
The Dow Jones industrial average <> was up 105.44
points, or 0.84 percent, at 12,699.47. The Standard & Poor's
500 Index <.SPX> was up 12.21 points, or 0.88 percent, at
1,403.05. The Nasdaq Composite Index <> was up 27.64
points, or 1.11 percent, at 2,514.34.
MasterCard shares rose 7 percent to $306.92.
JPMorgan Chase & Co <JPM.N> was one of the Dow's biggest
gainers, rising 1.8 percent to $43.62. A bank spokesman said
its $1.5 billion deal to acquire Bear Stearns Cos Inc <BSC.N>
would be completed on Friday, well ahead of earlier forecasts.
Further boosting financials were mounting expectations that
Bank of America's <BAC.N> deal to acquire mortgage lender
Countrywide Financial <CFC.N> would go through. Countrywide's
shares rose more than 9 percent to $5.43 while Bank of America
was up 2.1 percent at $34.58.
Energy and materials stocks were the only sectors lower on
Thursday. Both sectors were hurt by a decline in commodity
futures, including a $4.28 per barrel decline in oil futures
<CLc1> to $126.75 a barrel.
Retail stocks were riding high following several
stronger-than-forecast earnings reports.
Close-out retailer Big Lots announced a
higher-than-forecast gain in profit on strong sales at older
stores and lifted its full-year earnings forecast, sending its
shares up nearly 10 percent to $31.32.
Discount store operator Fred's Inc <FRED.O> also beat Wall
Street expectations after its restructuring initiative
succeeded. Fred's shares were up 6.8 percent to $12.24.
(Editing by Kenneth Barry)
