The market averages were also supported by significant strength among energy stocks, which benefited from oil prices above $70 a barrel. Shares of Exxon Mobil (XOM: chart) advanced 1.4%. Tech shares stood out among the most notable gainers, led by Research In Motion (RIMM: chart), up 20% on surging profit and revenue and Apple (APPL: chart), rising 1.5% on the release of its iPhone.

Chemical, internet, and disk drive stocks also posted solid gains. In the disk drive sector Komag (KOMG: chart) rose 8% after it agreed to be acquired by Western Digital (WDC: chart) for $1 billion. At the same time, some weakness was visible in the brokerage sector, Merrill Lynch (MER: chart) falling 1.5% and Lehman Brothers (LEH: chart) losing 1.7%.

In mid-afternoon trading, the Dow Jones industrial average rose 56.09, or 0.42%, to 13,478.37. The Standard & Poor's 500 index gained 6.85, or 0.45%, to 1,512.56, and the Nasdaq composite index climbed 12.88, or 0.49%, to 2,621.25. Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 5.08% from 5.11% late Thursday.


Construction spending rose 0.9% in May.

The Department of Commerce released its report on construction spending in the month of May on Friday, showing that spending increased by much more than economists had been expecting. The report showed that construction spending rose 0.9 percent in May following an upwardly revised 0.2 percent increase in April. Economists had expected spending to increase by 0.2 percent compared to the 0.1 percent increase originally reported for the previous month. Despite the increase, however, construction spending for the month remained 2.8 percent below construction spending in the same month last year.

The growth in construction spending reflected increases in spending on both private construction and public construction. The report showed that private construction spending rose 0.5 percent in May, as an increase in spending on non-residential construction more than offset a drop in spending on residential construction. At the same time, spending on public construction surged up 2.2 percent in May amid an increase in spending on both educational construction and highway construction.


9:45AM Market opened higher, boosted by Apple’s iPhone and RIM’s robust earnings.

U.S. stocks rallied at opening on Friday, reflecting end-of-quarter purchases, tame inflation data, as well as strength in the tech sector as Research in Motion posted robust quarterly earnings and Apple launched the iPhone. RIM (RIMM: chart) jumped 17% after the Blackberry maker announced a 76% gain in revenue and a 73% rise in profit in Q1. Apple (APPL: chart) added 1.2% in early trading.

Among other stocks in focus, Commerce Bancorp (CBH: chart) climbed 10% after the company said it had settled two federal regulatory probes. On the side of the losers, shares of Palm (PALM: chart) declined 4.3% after the maker of the Treo smart phone reported a 43% drop in quarterly profit.

The Dow Jones industrial average was up 49.83 points, or 0.37%, at 13,477.56. The blue-chip average was led higher by Alcoa (AA: chart), up 2.8%, DuPont (DD: chart), rising 1.6%, Exxon Mobil (XOM: chart), up 1.5%, and AT&T (T: chart), higher by 1.3%. The Standard & Poor's 500 Index was up 7.20 points, or 0.48%, at 1,513.54. The Nasdaq Composite Index was up 17.20 points, or 0.66%, at 2,622.55.

Personal income and spending increased in May.

Friday morning, the Department of Commerce released its report on personal income and spending in the month of May. While income and spending both increased, the growth came in below economist estimates. The report showed that personal income rose 0.4 percent in May following a downwardly revised 0.2 percent decrease in April. Economists had been expecting income to increase by 0.6 percent compared to the 0.1 percent decrease originally reported for the previous month. The rebound in personal income came as private wage and salary disbursements increased by $24.9 billion in May compared to a decrease of $36.4 billion in April.

The Commerce Department also said that personal spending rose 0.5 percent in May, matching the increase that was seen in the previous month. The increase in spending came in below economist estimates of 0.7 percent growth. With the spending growth outpacing income growth, personal saving as a percentage of disposable personal income was a negative 1.4 percent in May compared with a negative 1.2 percent in April. The report also showed that core consumer prices, which exclude food and energy prices, edged up 0.1 percent in May after rising 0.1 percent in April. On an annual basis, the pace of core consumer price growth slowed to 1.9 percent from 2.0 percent.


9:30AM The UK benchmark index is slightly down in spite of a strong opening.

The UK benchmark index is lower in mid-morning trading on Friday. The FTSE 100 was down 20.5 points at 6,551.0.

Advancers

BT Group was the leading advancer in the FTSE 100 stocks. The telecommunications group gained 1.3% as its chief executive said that analysts were too pessimistic about the prospects for revenue growth of the telecom provider. Falling sharply this week after a profit warning, lender Northern Rock, rallied 1.3% while oil stocks were also stronger. Royal Dutch Shell gained 1.2% and BP added 0.8%.