(Updates to midday trading)
* Visa, 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 Ryan Vlastelica
NEW YORK, Oct 30 (Reuters) - U.S. stocks mostly edged higher on Thursday, as a strong read on third-quarter economic growth raised new questions about monetary policy, while results at Visa single-handedly put the Dow in solidly higher territory.
Gross domestic product grew at a 3.5 percent annual rate in the third quarter, beating expectations, though down from the 4.6 percent rate in the second quarter.
The data came a day after the Federal Reserve ended its stimulative bond-buying program, leading investors to look to when the central bank will begin raising interest rates. The Fed has said its first rate hike would be dependent on the strength of economic data.
"A strong report, on the heels of a more hawkish tone from the Fed yesterday, has some investors thinking we could see a rate hike faster than might otherwise have been hoped," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland. "That's dampening the spirits of investors who were hoping for easier monetary conditions for an extended period."
In comments after a two-day meeting, the U.S. central bank expressed confidence in U.S. economic prospects and dropped a characterization of U.S. labor market slack as "significant."
Visa Inc jumped 8.8 percent to $233.50 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. MasterCard shares added 7.1 percent to $81.40.
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.
At 11:48 a.m. (1548 GMT) the Dow Jones industrial average rose 142.28 points, or 0.84 percent, to 17,116.59. Without Visa adding 120.7 points to the price-weighted Dow, the blue-chip index would be in almost negative territory. The S&P 500 gained 4.21 points, or 0.21 percent, to 1,986.51 and the Nasdaq Composite dropped 7.10 points, or 0.16 percent, to 4,542.12.
Shares of Facebook Inc fell 2.6 percent, dropping for a second straight day in the wake of its quarterly results. The social network's stock has lost 8.5 percent over the past two sessions.
Energy shares were the weakest of the day, dropping 1 percent alongside a 1.3 percent drop in the price of crude oil. ConocoPhillips fell 0.6 percent to $70.30 despite reporting adjusted earnings that beat expectations.
Avon Products was the S&P 500's biggest decliner, falling 7.6 percent to $10.13 and hitting its lowest level since July 1996 after third-quarter revenue was modestly below forecasts.
Advancing issues outnumbered declining ones on the NYSE by 1,603 to 1,331, for a 1.20-to-1 ratio on the upside; on the Nasdaq, 1,295 issues fell and 1,229 advanced for a 1.05-to-1 ratio favoring decliners.
The benchmark S&P 500 index was posting 49 new 52-week highs and 4 new lows; the Nasdaq Composite was recording 65 new highs and 35 new lows. (Editing by Nick Zieminski and Meredith Mazzilli)