U.S. Stocks Higher as Report Shows Rise in Personal Income

Before trading began, the Commerce Department said that both personal income and spending rose 0.4 percent in April, in line with what economists expected. Higher food and gas prices accounted for most of the spending increase.

A cut in the amount withdrawn from paychecks for Social Security has given incomes a boost this year. But that extra take-home pay has been pinched by higher prices for gasoline.

The Dow Jones industrial average was up 56.99 points, or 0.5 percent. The Standard and Poor’s 550-stock index rose 6.73 points, or 0.5 percent. The Nasdaq composite index was up 11.23 points, or 0.4 percent.

Trading is expected to be light before the long weekend. Markets are closed Monday for Memorial Day.

European and Asian stock markets mostly rose Friday as a recovery in commodity shares helped investors look past weak economic data from the United States and worries about Greece’s debt troubles.

Sentiment has been dented in recent weeks by fears that the American economy, the world’s largest, is running out of steam. In a revised look at economic growth, the Commerce Department reported Thursday that the economy grew at a tepid annual rate of 1.8 percent in the first quarter, lower than many economists expected. Gasoline prices that reached $4 a gallon and sharp cutbacks in government spending hindered growth. The Labor Department also said more people applied for unemployment benefits last week.

Traders have also been shaken by worries that Greece may not get its next rescue loan installment, with a top European Union official reportedly warning that the International Monetary Fund may hold back on its part of the bailout. Those jitters hurt the euro and stocks on Thursday, and on Friday Greek politicians, meeting in a cross-party crisis meeting, failed to reach a consensus on new austerity measures, as demanded by the European regulators, to convince investors it can help finance its debt for the next year.

The euro recovered from a sell-off on Thursday, rising to $1.4247 from $1.4140 the day before.

European shares posted solid gains in early trading. Britain’s FTSE 100 was 1 percent higher; Germany’s DAX rose 0.4 percent and France’s CAC 40 was 1 percent higher.

Commodities stocks led the gains, with Rio Tinto and Antofagasta up 1.8 percent and 2.4 percent.

In Asia, most indexes rose, though Japan’s Nikkei 225 index drifted down to close 0.4 percent lower at 9,521.94.

Sony fell 3.2 percent, a day after reporting a 259.6 billion yen ($3.2 billion) loss for the fiscal year ended March 2011 and its third straight year of losses. Costs of online security breaches around the world and the March 11 earthquake in northeastern Japan battered the electronics and entertainment giant.

Hong Kong’s Hang Seng gained 1 percent to 23,118.07. South Korea’s Kospi finished 0.4 percent higher at 2,100.24. Australia’s S. P./ASX 200 added 0.5 percent to 4,684.

Mainland Chinese shares sank to their lowest level in nearly eight months as investors, succumbing to gloom over the outlook for the latter half of the year, unloaded shares.

The benchmark Shanghai Composite Index lost 1 percent to 2,709.95, its lowest close since Sept. 30. The Shenzhen Composite Index fell 2 percent to 1,101.11. Shares in coal companies advanced while agricultural-related and textile shares fell sharply.

Benchmark oil for July delivery was up 25 cents to $100.48 per barrel on the New York Mercantile Exchange.

The dollar fell to 81.09 yen from 81.30 yen.

On Wall Street, all three indexes are down for the week. Stock markets took a hard fall Monday with a batch of bad news from Europe. Another downgrade of Greece’s weak credit rating, a warning on Italy’s debt and a major defeat of Spain’s ruling party over the weekend deepened worries about Europe’s debt crisis. But strong earnings and a plea to push Microsoft’s chief executive officer aside helped push stocks higher Thursday. The report pointing to a weaker economic recovery sent government bond yields to their lowest levels this year.

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