In line with expectations, the Commerce Department revised its reading of first-quarter gross domestic product to an annual rate of 0.9%, above its previous estimate of 0.6%.
"As long as the number holds above 0.5% we are still skirting [with] the term 'recession.' Stronger would obviously be better," said Marc Pado, U.S. market strategist at Cantor Fitzgerald, who cited better inventory numbers and improved exports for the upward revision.
In a separate report, the Labor Department said unemployment claims rose 4,000 to 372,000, a bit more than forecast. .
The Dow Jones Industrial Average gained 69.37 points to 12,663.4, with 23 of its 30 components posting gains, led by J.P. Morgan Chase , up 2.6%, and Citigroup Inc. , up 2.3%.
Alcoa Inc. and Intel Corp. fronted the blue-chip declines, with Alcoa down 1.8% and Intel off 1.4%.
The S&P 500 rose 9.53 points to 1,400.37.
Financial shares led sector gains on the S&P, up 1.9%, followed by health care and telecommunications, both up 1.3%.
Energy led the two industry groups on the decline, off 1.9%.
The Nasdaq Composite climbed 22.72 points higher to 2,509.42.
Oil futures also saw volatile action, briefly jumping higher after the Energy Department reported supplies of crude fell by 8.8 million barrels to 311.6 million last week. More recently, crude-oil futures slipped $2.81 to $128.22 a barrel.
On the New York Stock Exchange, volume hit 476 million shares, and advancers topped decliners 3 to 2. On the Nasdaq, 328 million issues were exchanged, and advancing stocks overtook decliners 3 to 2.
Shares of Countrywide Financial Corp. rose after the lender set a June 25 date for a shareholders meeting to approve its sale to Bank of America Corp. . .
Retail reports were mixed: Sears Holdings shares dropped 3% after reporting a surprise loss, while shares of Costco Wholesale Corp. edged higher after the warehouse retailer reported stronger-than-expected results.
On the deal-making front, Bristol-Myers Squibb Co. said it would buy Kosan Biosciences Inc. in a transaction valued at about $190 million.
In other M&A activity, Trump Entertainment Resorts Inc. said it would sell Trump Marina Hotel Casino in Atlantic City to Coastal Marina LLC for $316 million.
By Kate Gibson