Stronger-than-expected U.S. economic data boosted stocks on Friday while bonds held early gains and the dollar fell.
European stocks also got a lift from the U.S. data.
Before the open of regular U.S. stock trading, the Commerce Department said U.S. durable goods orders rose a stronger-than-expected 5.9 percent in July.
Another report said that U.S. new home sales rose 2.8 percent last month, also exceeding expectations.
The new home sales data showed the economy may not be quite as weak as expected. We had some quite strong numbers today, that's for sure, but we don't know if they'll last long enough to boost the markets, said David Sloan, economist at 4Cast Ltd in New York.
At 12 p.m. the Dow Jones industrial average was up 37.40 points, or 0.28 percent, at 13,273.28. The Standard & Poor's 500 Index was up 4.06 points, or 0.28 percent, at 1,466.56 and the Nasdaq Composite Index was up 7.74 points, or 0.30 percent, at 2,549.44.
Benchmark 10-year Treasury notes were 6/32 higher with the yield down three basis points to 4.63 percent. Analysts noted that the U.S. data was nearly a month old and did not reflect recent events.
The euro was up 0.5 percent at $1.3637 and the dollar was down 0.3 percent at 115.94 yen. Continued concerns about a credit crunch and liquidity overshadowed the U.S. data.
European stocks pared losses after the U.S. durable goods data and subsequently turned higher.
The Pan-European FTSEurofirst 300 index was up 0.34 percent to 1,514.45.
Japan's Nikkei share average slipped 67.35 points, or 0.4 percent to 16,248.97. It finished the week up 6.4 percent, however, to post its biggest weekly percentage gain since October 2002.
U.S. crude oil futures were higher and gasoline rose on news of problems at a refinery in Texas. At 10:45 a.m. on the New York Mercantile Exchange, October crude was up 88 cents, or 1.3 percent, at $70.71 per barrel.
Higher oil prices boosted the energy sector, with Exxon Mobil Corp. rising 2 percent to $85.35.
(Additional reporting by Jeremy Gaunt, Kristina Cooke, Gene Ramos, Pedro Nicolaci da Costa and Gertrude Chavez-Dreyfuss)