The Dow and S&P 500 closed up for a third straight session on Friday after several solid consumer-related reports reinforced investors' confidence in a steady recovery by the economy.

Government reports showing stronger-than-expected November retail sales and an unexpected rise in business inventories in October pointed to a recovery in consumer spending. A private survey also showed consumer sentiment improved in early December, lifting the S&P Retail index <.RLX> by 1.3 percent.

Today is a repeat of prior days, with economic data showing recession is bottoming out and recovery is here, said Rick Lake, portfolio manager of the Aston/Lake Partners LASSO Alternatives Fund in Greenwich, Connecticut.

The Dow Jones industrial average <.DJI> was up 65.67 points, or 0.63 percent, at 10,471.50. The Standard & Poor's 500 Index <.SPX> was up 4.06 points, or 0.37 percent, at 1,106.41. The Nasdaq Composite Index <.IXIC> was down 0.55 point, or 0.03 percent, at 2,190.31.

For the week, the Dow was up 0.8 percent, the S&P was near flat and the Nasdaq shed 0.2 percent.

The U.S. House of Representatives approved a bill aimed at safeguarding the financial system and warding off future crises. Bank of America closed up 2.8 percent at $15.63 as one of the top gainers on the Dow.

Mining stocks also advanced after JPMorgan lifted its price target on five companies in the sector, including Alcoa Inc and Freeport McMoRan .

Alcoa shares surged 8.2 percent to $14.61.

But National Semiconductor fell 3.6 percent to $14.73, pressuring the tech sector, a day after the company posted results that prompted concerns about its ability to regain market share.

The Philadelphia semiconductor index <.SOXX> fell 1.0 percent.

An index of airline stocks <.XAL> advanced 6.3 percent, its largest move up since May 4, after executives at several carriers pointed to improved outlooks in 2010.

Delta Air Lines was up 13.9 percent at $11.25 and US Airways rose 10.5 percent to close at $4.83.

United Technologies Corp gained 2.2 percent at $69.40 and provided the Dow's biggest lift after the company said it expects profits to rise about 10 percent in 2010 on cost cuts.

(Editing by Kenneth Barry)

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