Stocks rose on Thursday after strong results at Best Buy lifted consumer shares, although worries over the fate of banks emerged as details on sweeping rules to regulate the financial system were unveiled.

Data on U.S. economic growth and weekly jobless claims that was in line with expectations also helped boost market sentiment.

On the upside, shares of Best Buy , the largest U.S. electronics chain, jumped 14.9 percent to $38.46 after its quarterly results topped Wall Street's forecast and it foresaw full-year earnings above expectations. The news spread optimism about consumer spending, lifting shares of other retailers.

Wal-Mart was among the top boosts on the Dow, rising more than 2 percent to $52.77.

Shares of JPMorgan dropped 1.7 percent to $28.07, however, as investors fretted about the possible unintended consequences of a new push to regulate the financial system.

Treasury Secretary Timothy Geithner outlined new rules of the game in an effort to make the system tightly regulated enough that it cannot again pose a widespread threat to the economy.

The government are ramrodding things left and right and you can't turn around without some sneaky law proposal that could potentially wreak havoc, said John Schloegel, vice president of investment strategies for Capital Cities Asset Management in Austin, Texas.

The Dow Jones industrial average <.DJI> added 55.12 points, or 0.71 percent, to 7,804.93. The Standard & Poor's 500 Index <.SPX> put on 7.03 points, or 0.86 percent, to 820.91. The Nasdaq Composite Index <.IXIC> gained 26.22 points, or 1.71 percent, to 1,555.17.

The S&P financial index <.GSPF> was off 1.1 percent, while shares of Citigroup were down 3.7 percent at $2.84.

Government data showed the U.S. economy contracted slightly less than expected in the fourth quarter, although corporate profits in the same quarter plunged by the biggest margin since 1994. The number of workers collecting state unemployment benefits rose to a record in the latest week.

Recent better-than-expected housing and retail sales data has given rise to hopes that the recession-stricken economy was starting to show signs of life.

Atlanta Federal Reserve President Dennis Lockhart cautioned on Thursday, however, that one month of improved data does not add up to a recovery and said the U.S. recession will last for at least a few more months.

(Additional reporting by Edward Krudy; Editing by James Dalgleish)