Just before noon, the Dow Jones industrial average is up 185 points, or 1.7 percent, at 11,328. The S&P 500 index is up 15, or 1.2 percent, at 1,187. The Nasdaq composite index is up 28, or 1.1 percent, at 2,520.
The government says that consumers spent more on autos and furniture in July, pushing retail sales up by the most in four months. That news boosted stocks early Friday. They briefly turned negative after a dismal survey on consumers' views about their personal finances and the economy. But shares rose sharply again by midday.
If shares close higher, it will be the first time in more than a month that the market rose twice in a row.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
WASHINGTON (AP) -- The mixed economic signals driving the stock market's record-setting swings continued Friday with conflicting reports on retail sales and consumer sentiment.
The Dow Jones industrial average added more than 150 points early Friday after a government report consumers spent more on autos, furniture and gasoline in July, pushing up retail sales by the largest amount in four months. But U.S. stocks pared those early gains after a dismal survey on consumers' feelings about their personal finances and the economy. The Dow briefly turned negative. It was up 134 points, or 1.2 percent, to 11,277 around 11:30 a.m. in New york.
The retail sales data covered all of July. The market didn't start its wild ride until July 22. The Reuters/University of Michgan survey of consumer sentiment fell to a 30-year low. The sentiment survey was taken over the past 10 days, as Americans watched the markets leap and dive on news about Europe's spreading financial crisis, the first-ever downgrade of the U.S.'s credit rating, signals that the job market improved slightly in July and strong earnings from a technology bellwether.
A separate government report on Friday showed that businesses increased their stockpiles for the 18th month in a row. Growing inventories typically are a sign of confidence. But nervous consumers have held back recently; in June they cut their spending for the first time in nearly two years.
If the market's gyrations spook consumers, fears that the economy might tip back into recession could become self-fulfilling, analysts said. People might cut back on spending just as retailers stock up for the crucial holiday season. Businesses would slash new orders, and demand for manufacturers' goods would dip.
Investors are already dizzy from seesaw trading driven by concerns about economic growth and a spreading financial crisis in Europe.
In late morning trading, the Standard & Poor's 500 index added 9 points, or 0.8 percent, to 1,181. The Nasdaq composite index gained 18, or 0.7 percent, to 2,510.
If shares close higher, it will be the first time in more than a month that the market has risen two days in a row. The Dow and the S&P last rose for two trading days on July 6 and 7.
A bath of bad economic news had pummeled markets since before they started their long slide three weeks ago. At Thursday's close, the Dow had fallen more than 12 percent since that date.
The strong retail sales added to a recent trend of more positive data about the economy. The government said last week that hiring picked up in July after two dismal months, though employers still are adding jobs too slowly to significantly reduce unemployment. On Thursday, the government said that applications for unemployment benefits had fallen to a four-month low.
Shares have swung by hundreds of points each day this week as traders react with hair triggers to news about the economy, Federal Reserve policy and a financial crisis in Europe that threatens to spill over into U.S. banks.
High-speed trading by computers has contributed to the volatility, as shares hit high and low levels at which machines are programmed to buy or sell large numbers of shares.
Markets in Europe advanced on Friday and bank stocks recovered some of this week's losses. Regulators of major European exchanges banned the short-selling of financial company shares, protecting them from downward pressure by speculators. Asian markets closed mixed.
France's benchmark index, the CAC-40, rose 3.3 percent despite news that the nation's economy hit the brakes in the second quarter as exporters' wares piled up and consumers held onto their money.
Concerns about the French economy stoked fears about the crisis in the eurozone, where France has the second-largest economy after Germany's. As their heavily indebted neighbors struggle to stay afloat financially, the region's economic powers must shoulder most of the costs of rescuing Greece, Portugal and Ireland from defaulting on their debts. A default would increase borrowing costs and hurt the regional currency.
If France's economy falters or if it loses its AAA credit rating, the nations might have trouble raising the money that they need to pay for future bailouts. Worries about debt issued by Italy and Spain, and the stability of banks there, have prompted the European Central Bank to buy their sovereign bonds to lower their borrowing costs.
Italy and Spain have Europe's third- and fourth-largest economies. The current bailout programs probably would be too small to rescue them from a potential default.
Most other major European markets rose by more than 3 percent, including Germany's DAX index, Italy's FTSE MIB and Spain's IBEX. London's FTSE index rose by more than 2 percent.
The gains followed a winning day on Wall Street that would have ranked as a stunning rally during any normal trading week.
The Dow Jones industrial average soared 423 points on Thursday. It had already fallen 634 points Monday, risen 429 Tuesday and fallen 519 Wednesday. Never before has the Dow had four 400-point swings in a row.
The S&P 500 finished up 4.6 percent and the Nasdaq composite index 4.7 percent.
The Standard & Poor's 500 index has risen or fallen at least 4 percent each day. That has not happened on four consecutive days since November 2008, the depths of the crisis.
American investors were encouraged before the market opened Thursday by news that new claims for unemployment benefits dropped below 400,000 for the first time in more than four months, signaling fewer layoffs and a job market that is improving slowly.