By Chris Sanders (Reuters)

U.S. stocks rose on Thursday as shares of mobile phone maker Motorola Inc. gained on a positive outlook for the global handset market and after a brokerage raised its price target for General Electric Co.

Shares of GE rose 1 percent after Morgan Stanley raised its price target on the conglomerate to $44 from $42, saying the company's shares were undervalued and could double in price in three years.

But data showing stronger inflation than previously thought in the fourth quarter limited gains on the market amid concerns the Federal Reserve may have to continue raising interest rates to keep inflation at bay.

The Dow Jones industrial average was up 42.34 points, or 0.38 percent, at 11,258.04. The Standard & Poor's 500 Index was up 7.16 points, or 0.55 percent, at 1,310.05. The Nasdaq Composite Index was up 15.09 points, or 0.65 percent, at 2,352.87.

"Right now, the Nasdaq and the OTC-type stocks look pretty good. The Nasdaq made a significant breakout yesterday at 2,340. At times, the market acts like an elastic band," said Bruce Zaro, chief technical strategist at Delta Global Advisors. "When you let it go, it tends to have (more) energy to the upside, and I think with this breakout you'll see that."

Shares of General Electric rose 34 cents to $34.27.

A rise in the shares of Motorola Inc., the world's No. 2 mobile phone maker, lent support to the technology sector after rival Nokia raised its outlook for the global handset market.

Weighing on the market were shares of Web search company Google Inc. after it said it plans to sell up to $2 billion worth of stock. Google shares fell 2 percent, to $387.07.

Google is joining the S&P 500 index and is making more stock available to be bought by funds that track the index.

Gross Domestic Product grew at an upwardly revised 1.7 percent annual rate in the fourth quarter -- in line with forecasts -- according to the Commerce Department.

The fourth-quarter GDP deflator -- an inflation measure -- came in at 3.5 percent, above Wall Street expectations.