Updated from 4:19 p.m. EDT

The

Dow Jones Industrial Average

and the

S&P 500

pushed farther into record territory Friday as stronger-than-expected consumer sentiment data helped lure in more buyers after a session of giant gains.

The Dow was up 45.52 points, or 0.33%, at 13,907.25, and the S&P gained 5.27 points, or 0.2%, to 1552.50. The

Nasdaq Composite

added 4.80 points, or 0.31%, at 2707.

Blue-chip indices opened little changed but quickly turned higher after the 10 a.m. EDT release of the University of Michigan consumer sentiment index. The preliminary July reading for the index came in at 92.4, up from 85.3 in June and well above economists' expectations.

Following the data, Treasury prices were on the rise, lowering yields. The 10-year note added 5/32 in price, yielding 5.10%, and the 30-year bond was up 17/32, yielding 5.17%.

Breadth and volume weakened from the last session's impressive levels. About 2.81 billion shares changed hands on the

New York Stock Exchange

, as advancers barely edged decliners. Volume on the Nasdaq reached 1.77 billion shares, with losers topping winners 8 to 7.

On Thursday, the Dow jumped 283.96 points, or 2.09%, to 13,861.73, its first time above 13,800 and its biggest one-day advance in four years. The S&P soared 28.94 points, or 1.91%, to 1547.70 for its own record.

The Nasdaq rocketed up 49.94 points, or 1.88%, to 2701.73.

"It was a market melt-up yesterday," said Paul Mendelsohn, chief investment strategist with Windham Financial. "All sectors participated, and everything moved higher. The market has shrugged off the subprime issue, and while earnings are decelerating, they're still coming in better than expected."

After a steep decline Tuesday, the major averages managed to bounce back strong. Over the five sessions, the Dow rose 2.2%, and both the S&P 500 and the Nasdaq finished higher by 1.5%.

"The market loves to climb a wall of worry, and that's what happened this week," said Jay Suskind, head of institutional equity trading with Ryan Beck & Co. "As long as people are worried about the market going up, it'll keep going. I'm surprised by this week's action, and as we go into a rich week of earnings on Monday, we'll see how we trade off of that."

Several other economic reports influenced the tone. In one of them, the Labor Department said business inventories rose 0.5% in May, ahead of estimates.

However, not all of the data points were rosy. The Commerce Department said retail sales fell 0.9% last month, the largest decline in nearly two years and triple what economists had anticipated. Excluding autos, retail sales were down 0.4% in June, compared with expectations of a 0.2% rise.

Ian Shepherdson, chief economist with High Frequency Economics, said the report shows that rising gas prices are hurting the sector, and there's more pain to come.

"June sales were depressed by a 2.3% drop in building materials, which had jumped 4.7% in May," he said. "There were declines in furniture, electronics, clothing and department stores, too. The trend in the level of sales is still rising, but at a slowing pace."

Separately, the government said its import price index rose 1% in June, higher than expected. Petroleum prices climbed 4.7% for the month, boosting the headline number. Over the past year, import prices have risen 2.3%.

Turning to stocks, mergers and acquisitions have been a key component to the market's rally in the past few months, and the pace of deals appears to be holding steady.

According to a report in

The Wall Street Journal

, the Dutch Supreme Court has ruled that

ABN Amro

( ABN) may sell its U.S.-based LaSalle Bank to

Bank of America

(BAC) - Get Report

without shareholders having to vote. Shares of ABN rose 3.9% to $50.50, while Bank of America slipped 0.1% to $49.50.

Elsewhere,

Energizer Holdings

(ENR) - Get Report

reached an agreement to acquire

Playtex Products

(PYX) - Get Report

for $18.30 a share in cash and the assumption of debt. The total value of the transaction is roughly $1.9 billion. Playtex surged 15.8% to end the day at $17.97, and Energizer was higher by 0.9% to $107.67.

The prior session saw

Rio Tinto

( RTP) come in with a $38 billion bid for

Alcan

(AL) - Get Report

, trumping a rival offer from

Alcoa

(AA) - Get Report

. After the close, Alcoa said it would end its pursuit of the Canadian company.

Rio Tinto slumped 4.3% to $304.14, and Alcan fell 1% to $97.50. Alcoa jumped 4.6% to $47.35.

Meanwhile,

General Electric

(GE) - Get Report

posted second-quarter earnings of 52 cents a share and revenue of $42.3 billion. At the same time, the company increased its buyback to $14 billion for 2007. Analysts were looking for a profit of 52 cents and a top line of $41.7 billion for the quarter.

GE projected third-quarter earnings from continuing operations of 54 cents to 56 cents a share, up 15% to 19% from last year and in line with expectations. The company reaffirmed its guidance for the full year, and shares climbed 50 cents, or 1.3%, to $39.50.

Another company with a sizable repurchase was

Amgen

(AMGN) - Get Report

, which said it will increase its own program by $5 billion. Amgen added 98 cents, or 1.8%, to finish the week at $56.93.

Among commodities, crude pushed closer to $74 a barrel. The front-month August contract was up $1.43 to close at $73.93 a barrel. Gasoline prices were down 4 cents at $2.22 a gallon.

Overseas, markets were higher. Tokyo's Nikkei added 1.4%, and Hong Kong's Hang Seng was better by 1.3%. London's FTSE tacked on 0.3%, and Frankfurt's DAX was up 0.5%.