Wall Street stocks got a lift on Friday, and oil prices edged higher, while U.S. Treasury debt prices fell, with recent economic data confirming a slightly better outlook for the U.S. economy.

The euro was little changed but euro zone governments face large re-financing needs in early 2012 and investors doubt that the region has made much progress in dealing with its fiscal problems.

U.S. economic data on Friday was mixed with consumer spending growth tepid and a gauge of business investment down for a second month, but overall there have been signs in recent weeks that the economy is improving.

The data itself has been modestly stronger in the fourth quarter but nothing that changes the baseline slow growth story, said Andrew Slimmon, managing director, Global Investment Solutions of Morgan Stanley Smith Barney in Chicago.

At midsession the Dow Jones industrial average <.DJI> was up 73.38 points, or 0.60 percent, at 12,243.03. The Standard & Poor's 500 Index <.SPX> was up 7.29 points, or 0.58 percent, at 1,261.29. The Nasdaq Composite Index <.IXIC> was up 9.74 points, or 0.37 percent, at 2,609.19.

MSCI's world equity index <.MIWD00000PUS> gained 0.6 percent, but is set for a drop of just under 8 percent in 2011.

The pan-European FTSEurofirst 300 index <.FTEU3> rose 0.8 percent on low volume and ended up 3.4 percent for the week, paring its year-to-date loss to 12 percent. <.EU>

The Japanese market was closed on Friday for a holiday.

U.S., European and some Asian markets will be closed on Monday for the Christmas holiday.

Also on Friday, the U.S. Congress, after months of bitter infighting, approved a two-month extension of a payroll tax cut that President Barack Obama argues is vital to the health of the economy as unemployment remains high.

The passage of the tax-cut extension will leave most Americans' income intact, supporting their demand for gasoline, and other goods and services.

A Wall Street Journal report that the Federal Reserve could leave interest rates near zero for longer than it has said also fanned hopes of U.S. growth and higher corporate profits.

The U.S. central bank has previously said it would probably leave rates unchanged until at least the middle of 2013 and officials are considering offering interest rate forecasts that could suggest the Fed will keep rates on hold for longer.

Despite some encouraging signs from the world's biggest economy, the festering euro zone debt crisis has reined in investor enthusiasm for stocks, the euro and commodities.

There's no doubt that events in the euro area in the first quarter of next year... have the potential to have a profound impact across the globe, said Chris Scicluna, an economist at Daiwa Capital Markets.

The euro was down 0.15 percent against the U.S. dollar at $1.3031. The 17-nation common currency erased earlier gains but was holding above a recent 11-month low of $1.2945.

U.S. crude futures were up 37 cents at $99.91 a barrel, while the February Brent contract in London was up 19 cents at $108.08, erasing earlier losses.

Spot gold prices edged up 0.2 percent at $1,606 an ounce and on track for a 0.5 percent gain on the week.

(Additional reporting by Richard Hubbard and Neal Armstrong in London)