At the closing bell of a shortened trading day, the Dow Jones Industrial Average was up 0.58 per cent to 8468.16 and the Nasdaq added 0.22 per cent to 1524.90.
The broad Standard & Poor's 500 index rose 0.55 per cent to a preliminary close of 867.90.
Ahead of the opening, the US Commerce Department reported personal income contracted 0.2 per cent in November from the previous month and spending shrank 0.6 per cent, in a further sign of consumer gloom.
But Ryan Sweet at Economy.com said that because prices are falling, real, inflation-adjusted spending increased 0.6 per cent, "its first increase since May and its largest in two years,'' which he called "encouraging.''
"The increase in real spending is a positive for fourth quarter real GDP (gross domestic product), which could post its largest decline since the early 1980s,'' he added.
"That said, the increase in real spending is due to declining prices as opposed to stronger consumption.
"Therefore, real spending is sending a false signal on the strength of underlying consumption.''
New labour data showed US weekly jobless claims rose by 30,000 over the past week to 586,000.
"The jobless claims data show further significant weakening in the economy last week,'' said John Ryding at RDQ Economics, who predicted unemployment would rise to 7 per cent for December.
Al Goldman at Wachovia Securities said Wall Street has been able to shake off most of the bleak economic news in recent weeks but added that "the market remains very fickle (and) confidence very thin.''
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