Wall Street stocks rose in early trading on Friday after Europe's debt crisis drove heavy market losses this week, with the S&P 500 falling through important technical levels and facing another key test of strength.

Selling on Thursday afternoon pushed the S&P 500 through a support level at around 1,230. The next key test will be whether the index can hold its 50-day moving average just above 1,200, possibly setting the stage for a bounce if it does.

Growing concerns about Europe's debt crisis have set U.S. stocks up for their worst week in two months.

Eurozone and International Monetary Fund officials have discussed the idea of the European Central Bank lending to the IMF so it has sufficient resources to bail out even the biggest Eurozone sovereigns, Reuters reported Thursday.

It's light volume, so it's hard for us to put credence in a bounce off of yesterday's lows, said Sal Arnuk, co-manager of trading at Themis Trading in Chatham, New Jersey. We are trading off European headlines, what's going to happen with the EU and reaction to Spanish bonds rebounding.

European sovereign debt yields, an important risk barometer for investors, eased from recent highs while the euro firmed. The yield on the Spanish 10-year, a recent focus of investors' concerns, fell back to 6.44 percent after rising above 7 percent earlier in the session.

The Dow Jones industrial average gained 40.79 points, or 0.35 percent, to 11,811.52. The Standard & Poor's 500 Index rose 4.67 points, or 0.38 percent, to 1,220.80. The Nasdaq Composite Index added 4.25 points, or 0.16 percent, to 2,592.24.

The S&P 500 is down 3.5 percent this week. That would be its worst weekly run since late September.

In another crisis flashpoint, Greece's national unity government will submit a 2012 austerity budget to parliament on Friday, its first task in meeting the terms of an international bailout, but a rift widened between the coalition's main parties.

The crisis comes at a time when the U.S. economy is gaining steam as factories produce more cars and slowing inflation relieves pressure on spending power. That is putting the country on a stronger footing to resist an economic storm gathering over Europe.

H J Heinz Co. reported lower quarterly profit early Friday, but the company stood by its full-year forecast. The shares fell 1.5 percent to $51.97.

(Editing by Jeffrey Benkoe)