- The Washington Times - Friday, May 30, 2008

NEW YORK (AP) - 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 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 would curb 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 about 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 are continuing to reach into their wallets for plastic. The company’s shares jumped to a fresh high after the credit card processor said it still expects to see double-digit growth in net revenue this year. While it said gross dollar growth in the U.S. is slowing, purchasing is increasing in other parts of the world. Avoiding a big falloff in consumer spending coupled with strength elsewhere in the world could help the U.S. economy avoid a serious downturn, some economists have reasoned.

The Dow Jones Industrial Average rose 52.19, or 0.41 percent, to 12,646.22. The Dow was up nearly 133 points at its high of the session.

Broader stock indicators also rose after trading mixed early in the session. 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.

Government bonds fell as stocks rose. The 10-year Treasury note’s yield, which moves opposite its price, rose to 4.09 percent from 4.01 percent late Wednesday.

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. The Energy Department said unexpected declines in crude and gasoline supplies last week stemmed from delays in unloading tankers.

In corporate news, MasterCard rose $22.11, or 7.7 percent, to $309 after releasing its forecast. Retailers also offered insights into the effects of energy costs on consumers.

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 $72.98, however, after Costco warned that Wall Street’s forecast for the company’s fourth quarter might be too optimistic.

Retailer Sears Holdings Corp. fell $3.22, or 3.6 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.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 1.23 billion shares compared with 1.21 billion shares traded Wednesday.

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