US STOCKS-Wall St up on GDP, earnings; fund year-end lifts winners

* Nikkei report on GPIF allocation changes gives stocks support

* Visa (Xetra: A0NC7B - news) , MasterCard both rally after results

* Third-quarter GDP tops expectations

* Energy shares fall alongside drop in crude prices

* Dow up 0.8 pct, S&P 500 up 0.2 pct, Nasdaq down 0.2 pct

By Rodrigo Campos

NEW YORK, Oct 30 (Reuters) - U.S. stocks rallied on Thursday, boosted by a strong reading on quarterly economic growth and on the back of upbeat earnings reports including Visa, which accounted for nearly 150 points in the Dow industrials.

Gains on the S&P 500 were led by the year's best performing sectors, healthcare and utilities. Analysts cited buying of winning stocks from mutual funds for the run in those sectors, as funds close their books for the year at the end of this month.

"End of year for mutual funds is most likely going to be selling losers and continue to buy winners," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

Gross domestic product grew at a 3.5 percent annual rate in the third quarter, beating expectations. A separate report showed first-time applications for unemployment benefits rose marginally last week, but a measure of underlying trends hit its lowest level since May 2000 in a show of labor market strength.

Adding to support from earnings and economic data, market participants cited a report from the Nikkei newspaper that confirmed expectations that Japan's Government Pension Investment Fund, the world's largest public pension, would cut holdings of Japanese bonds and add to equities.

The iShares MSCI Japan ETF gained 1.1 percent and U.S. dollar denominated Nikkei futures gained 1.3 percent.

"The more you hear demand for equities picking up globally, that is going to be a net positive for U.S. equities," said Quincy Krosby, market strategist at Prudential Financial (NYSE: PJH - news) in Newark, New Jersey.

"If you look globally, growth is here in the United States," she said.

At 2:49 p.m. EDT (1829 GMT) the Dow Jones industrial average rose 211.13 points, or 1.24 percent, to 17,185.44, the S&P 500 gained 10.11 points, or 0.51 percent, to 1,992.41 and the Nasdaq Composite added 10.78 points, or 0.24 percent, to 4,560.01.

Visa Inc jumped 11.1 percent to $238.49 as the biggest boost to both the Dow and S&P 500 a day after it reported adjusted earnings that topped expectations, and said the mobile payment industry would be "a great driver" for business.

MasterCard Inc also posted a better-than-expected profit, while revenue was up almost 13 percent. Its shares added 9.1 percent to $82.88.

So far this reporting season, 75.5 percent of S&P 500 companies have exceeded profit expectations, according to Thomson Reuters data, above the long-term average of 63 percent.

Advancing issues outnumbered declining ones on the NYSE by 1,949 to 1,088, for a 1.79-to-1 ratio on the upside; on the Nasdaq, 1,677 issues rose and 963 fell for a 1.74-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 79 new 52-week highs and 4 new lows; the Nasdaq Composite was recording 114 new highs and 40 new lows. (Reporting by Rodrigo Campos; Editing by Nick Zieminski)