Updated from 4:10 p.m. EDT

Stocks edged higher in preholiday trading Friday after a government report cast U.S. consumers in an uncharacteristically prudent light.

The

Dow Jones Industrial Average

rose 4.95 points, or 0.05%, to 10,542.55. The

S&P 500

was higher by 1.16 points, or 0.1%, at 1198.78, and the

Nasdaq Composite

added 4.49 points, or 0.22%, to 2075.73. The 10-year Treasury was up 1/32 in price to yield 4.07%, while the dollar was lower against the euro and the yen.

"I expected the market to show weakness today, with profit-taking headed into the long weekend," says Dave Briggs, head of equity trading with Federated Investors. "People must be feeling more confident. I don't like this market technically, but fundamentally it's working great. Whenever there's a dip people are finding a buying opportunity. I'm still cautious, but there seems to be a ton of cash out there."

Volume was anemic headed into the holiday weekend. About 1.36 billion shares changed hands on the

New York Stock Exchange

, with advancers beating decliners by a 2-to-1 margin. Volume on the Nasdaq was 1.24 billion shares, with advancers narrowly outpacing decliners 4 to 3.

For the week, the Nasdaq rose 1.43%, the S&P 500 rose 0.79%, and the Dow added 0.67%.

The Commerce Department said personal spending rose 0.6% in April, two-tenths of a percent below economists' forecast. Personal income was in line with estimates at plus 0.7%. The University of Michigan pegged consumer sentiment at 86.9 for May, up from the preliminary reading of 85.3.

"In the light of the strong, albeit Easter-boosted, retail sales numbers, we had expected better," says Ian Shepherdson, chief economist with High Frequency Economics. "Even if total real spending matches the April increase in May and June, the second-quarter increase will be a relatively modest 3.2%, less than the first quarter's 3.6%"

The Food and Drug Administration is investigating reports that some men using

Pfizer's

(PFE) - Get Report

impotence drug Viagra have experienced blindness. The FDA has reportedly received 50 reports of blindness after use. Pfizer, a Dow component, was down 55 cents, or 1.9%, to close at $28.35.

Oil's upward march continued, with July crude adding 84 cents to $51.85, rising on news that Saudi Arabia is in a state of alert after King Fahd was admitted to a hospital. The newly benchmarked July contract has risen every day this week and is up more than 5% since last Friday.

Stocks rallied Thursday after the Commerce Department upwardly revised its estimate of first-quarter GDP, pushing the Dow to its best close since April 7, the S&P to its best close since March 15 and the Nasdaq Composite to its best close since March 8.

Stronger sectors Friday included energy, financials, retail and materials. Tech, health care, drugs and semiconductors were among the weaker areas.

The Nasdaq has been paced by chip shares, which have rallied 9% on the Philadelphia Semiconductor Index over three weeks.

Intel

(INTC) - Get Report

has risen for 13 straight sessions, adding another 2 cents, or 0.1%, to close at $27.39 Friday. The SOX, meanwhile, lost 0.7% despite Intel's gain.

TiVo

(TIVO) - Get Report

closed lower after posting a sharply narrowed first-quarter loss of $857,000, or 1 cent a share, on a 36% jump in revenue to $46.9 million. Both numbers beat estimates handily. The stock fell 21 cents, or 3%, at $6.73.

One day after New York Attorney General Eliot Spitzer sued

American International Group

(AIG) - Get Report

and two former executives, the stock was still rising. After gaining 3% Thursday, AIG added 69 cents, or 1.2%, to $56.40 on Friday.

Tech Data

(TECD) - Get Report

rose 2.5% despite first-quarter earnings and second-quarter guidance that both missed forecasts. The computer reseller, which is sometimes viewed as an industry bellwether, cited weakness in Europe. The stock was also downgraded by brokerage First Albany to underperform from neutral. Tech Data was higher by $1 to close at $36.61.

Specialty retailer

Chico's

(CHS) - Get Report

rose 8.4% after saying first-quarter earnings jumped 32% from a year ago to $47.2 million, or 26 cents a share, on revenue of $327.3 million. Analysts had forecast 25 cents and $327.8 million. Shares were up $2.63 to $33.85.

Caremark Rx

(CMX)

is nearing a settlement under which it will pay about $100 million to settle federal allegations involving its AdvancePCS unit. The company and the entire pharmacy benefits management industry have

been the subject of

extensive coverage on this Web site. Caremark was down 4 cents, or 0.1%, to $44.21.

In other earnings, teen retailer

Wet Seal

(WTSLA)

TST Recommends

posted a first-quarter loss of $8.6 million, or 23 cents a share, compared with a net loss of $20.0 million, or 66 cents a share, a year ago. The Thomson First Call consensus was for a loss of 41 cents a share. Wet Seal said it has closed 153 stores in hopes of returning the company to profitability. Shares added 34 cents, or 8.8%, to $4.19.

Ditech Communications

(DITC)

posted better-than-expected fourth-quarter earnings but whacked first-quarter revenue guidance, blaming lower orders from

Nextel

(NXTL)

. The shares were off $4.80, or 38.1%, to finish at $7.79.

Lowe's

(LOW) - Get Report

said it raised its quarterly dividend by 50% to 6 cents, up from 4 cents. The dividend will be payable July 29 to shareholders of record on July 15. Shares of Lowe's were lower by 74 cents, or 1.3%, to $57.15.

In a filing with the U.S.

Securities and Exchange Commission

late Thursday,

Wachovia

(WB) - Get Report

said it may sell up to $22 billion in debt, common stock, preferred stock and other securities. The proceeds generated will be used for reducing debt, acquisitions and stock repurchases. Wachovia lost 88 cents, or 1.7%, to $51.04.

Chinese staffing company

51Job

(JOBS) - Get Report

has approved a $25 million share buyback program over the next 12 months. Shares gained 70 cents, or 5.1%, to $14.48.

In ratings news, Merrill Lynch upgraded

Visteon

(VC) - Get Report

to buy, sending the stock up another 31 cents, or 4.1%, to $7.87. Visteon has gained over the previous two sessions after outlining a bailout by former parent

Ford

(F) - Get Report

on Wednesday.

Goldman Sachs initiated coverage of several automotive companies on Friday. The brokerage started automaker

General Motors

(GM) - Get Report

at underperform, while Ford was seen as in-line. The firm started

Delphi

(DPH)

,

Lear

(LEA) - Get Report

and

ArvinMeritor

(ARM)

at underperform.

Also,

Dana

(DCN)

and

Johnson Controls

(JCI) - Get Report

were initiated as outperforming stocks at Goldman Sachs.

Overseas markets were mixed, with London's FTSE 100 falling 0.2% to 4986 and Germany's Xetra DAX up 0.2% at 4444. In Asia, Japan's Nikkei rose 1.5% overnight to 11,192, while Hong Kong's Hang Seng added 1.1% to 13,715.

To view Gregg Greenberg's video take on today's market, click here

.