NEW YORK (CNNMoney.com) - Stocks rallied for the second straight session Thursday as investors set aside their inflation jitters and returned to the market.

The Dow Jones industrial average (up 93.73 to 11,211.05, Charts) added nearly 100 points and ended 0.8 percent higher. The broader Standard & Poor's 500 index (up 14.31 to 1,272.88, Charts) gained more than 1 percent, and the Nasdaq composite (up 29.07 to 2,198.24, Charts), which has been hit harder than blue chips in recent sessions, rallied 1.3 percent.

More economic news: Slow news is good news First-quarter economic growth is revised up but the number is below forecasts, reducing fears of inflation. (more) Expensive gasoline = consumer belt-tightening New survey from industry group indicates more consumers are feeling the gas price pinch; summer spending could suffer. (more) 2-headed monster stalks markets Some investors worry about a slowdown, others point to inflation. Which group is right? (more)

A fresh set of inflation worries have kept investors on edge the past two weeks, but those concerns were eased after the latest economic reports showed solid growth but few signs of inflation flaring up.

"Things haven't really changed that much, but after days of selling, any good news is taken as an opportunity to step back in the market," said Edgar Peters, chief investment officer at PanAgora Asset Management Inc.

Stocks got another boost late in the session after Federal Reserve Chairman Ben Bernanke reiterated the central bank's inflation-fighting credentials.

Bernanke said in a letter that long-term inflation expectations appear to be well contained and would remain so as long as the Fed remains committed to price stability.

Despite two straight days of gains, the market could easily turn. "These days things are so uncertain, the market will pay attention to almost anything," Peters said.

On Friday, investors will be watching for reports from the Commerce Department on personal income and spending. They'll also take in the University of Michigan's final reading on consumer sentiment.

As of 5:30 p.m. ET, stock futures on the Dow and the Nasdaq were pointing higher, indicating a higher open on Friday. Futures on the S&P 500 indicated a lower opening.

Readings on the housing sector and economic growth were the main engines driving stocks higher Thursday.

The National Association of Realtors said the pace of sales of existing homes fell 2 percent to a 6.76 million annual rate in April, roughly in line with expectations.

Furthermore, home prices rose only 4.2 percent, the slowest year-over-year increase since 2001, according to Hugh Johnson, chairman of asset management company Johnson Illington Advisors.

Investors also took in a report on gross domestic product, the broadest measure of the nation's economic activity, before the market open.

The Commerce Department revised quarterly GDP up to a 5.3 percent annual rate. While that exceeded the 4.8 percent rate initially estimated for the period, it fell below the 5.8 percent growth rate economists surveyed by Briefing.com had expected.

A closely watched inflation measure in the report, which measures prices paid by consumers for items, excluding food or energy, held steady at a 2 percent annual gain, calming fears in the market.

"It's good news because it implies the Fed has another reason to perhaps drag its feet or pause in June," Johnson said.

The Fed has raised rates 16 straight times since June 2004 in a bid to contain inflation, and some investors and policy-makers are nervous the central bank could overshoot, pushing rates too high and hurting economic growth - and corporate earnings.

Among blue chips, 28 out of 30 Dow components rose.

General Motors (up $1.39 to $27.90, Research) jumped 5 percent, leading advances on the blue-chip index for the second straight session. Ford Motor (up $0.22 to $7.15, Research) gained about 3 percent in sentiment.

Wal-Mart (up $1.42 to $49.45, Research) jumped nearly 3 percent after Banc of America Securities raised its rating on the retailer to "buy" from "neutral," Briefing.com said.

Investors showed little reaction to the verdict in the Enron fraud case. Former Enron chief executives Jeffrey Skilling and Kenneth Lay were found guilty of conspiracy and fraud in the business trial of the century.

Among tech stocks, eBay (up $3.68 to $33.88, Research) climbed 12 percent after Prudential upgraded the online auctioneer to "overweight" from "neutral." The company also said it was teaming up Yahoo! (up $1.13 to $32.92, Research) to provide services for each others' customers.

MasterCard (up $7.00 to $46.00, Research) surged 18 percent in its first day of trading. The credit card company priced its initial public offering of stock at $39 a share, below the $40 to $43 forecasted range.

Internet telephone service provider Vonage Holdings (down $1.85 to $13.00, Research) sank 12 percent after making the worst market debut of the year Wednesday when its shares slid nearly 13 percent on their first day of trading.

In after-hours trading, shares of Chico's FAS Inc. (Research) rose after the company said its profits climbed during the first quarter, while shares of the drugmaker Celgene Corp. (Research) also climbed after the Food and Drug Administration approved its drug Thalomid as a treatment for a form of blood cancer.

In merger news, Regions Financial (down $1.09 to $34.44, Research) has agreed to buy AmSouth Bancorp (down $0.90 to $28.00, Research) for about $10 billion, creating one of the biggest banks in the country.

Market breadth was positive. On the New York Stock Exchange, advancers beat decliners by a margin of three to one on volume of 1.73 billion shares. On the Nasdaq, winners beat losers also by a margin of three to one as 2.01 billion shares changed hands.

U.S. light crude oil for July delivery climbed $1.46 to settle at $71.32 a barrel on the New York Mercantile Exchange after tumbling below $70 Wednesday.

Treasury prices fell, raising the yield on the benchmark 10-year note to 5.07 percent, up from 5.04 percent late Wednesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar was little changed against the euro and fell versus the yen.

COMEX gold rose $10.20 to $647.70 an ounce.

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