Economic reports were mixed:

The Chicago Institute for Supply Management reported that its business barometer index rose by 9.7 to 58.7 in May from April, the highest level since March 2012 and in sharp contrast to April's three and a half year low. "Order backlogs, suppliers' deliveries and employment aall snapped out of contraction," Chicago ISM said.

The May reading came in way ahead of the level of level of 50 expected by economists polled by Thomson Reuters. A reading of above 50 indicates expansion.

Also on Friday, the Bureau of Economic Analysis reported that personal income in the U.S. was down $5.6 billion, or less than 0.1%, during April, after increasing by 0.3% in March. Economists on average were expecting an increase of 0.1% in April.

Shares of American International Group ( AIG) were down 4% to close at $44.46, after the insurer announced that it hadn't received a 10% deposit by a May 30 deadline, as required under its agreement to sell a majority stake in International Lease Financial Corporation to an investor group led by New China Trust.

AIG has the right to cancel the deal, but hasn't chosen to do so, at least yet. A company spokesman declined to comment.

AIG is relying on receiving $4.2 billion through the sale of an 80.1% stake in ILFC, with the agreement allowing the investor group to purchase up to 90% of the leasing subsidiary.

Otherwise, the insurer may have to make a significant reduction in share buybacks this year.

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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