US STOCKS-Wall St rises on oil drop, housing plan optimism

* Fannie and Freddie shares jump on rescue plan optimism

* Oil drops $4 on large builds in gasoline stocks

* Dow up 0.3 pct, S&P 500 up 0.4 pct, Nasdaq up 1 pct (Updates with House of Representatives approval of housing plan, Amazon share move after the bell)

By Kristina Cooke

NEW YORK, July 23 (Reuters) - U.S. stocks rose on Wednesday as financial shares climbed on optimism about a rescue plan for mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) and as the price of oil fell.

Financial shares rose after President George W. Bush dropped a threat to veto a housing rescue bill, clearing the way for measures aimed at stabilizing the battered housing market, which has been the source of huge losses for financial companies.

Removal of the presidential veto threat spurred investors to snap up shares of Fannie and Freddie, the top two U.S. housing finance companies, which would receive an emergency government lifeline under the bill.

After the closing bell, the U.S. House of Representatives approved the housing market rescue legislation. The bill will now go to the Senate.

Oil prices fell more than $4 after government data showed a big increase in U.S. inventories of gasoline, boosting companies sensitive to higher fuel costs, such as retailers and airlines.