Encouraging news about how consumers feel about the economy and how much they're spending sent stocks higher on Friday.

The strong showing in retail sales last month raised hopes that consumers are starting to feel more comfortable opening their wallets after months of building savings. The 1.3 percent increase was more than double the gain that analysts had forecast.

The government's retail report came as a relief to many investors who have been frustrated that consumer spending, a mainstay of the U.S. economy, has remained in a funk even as other parts of the economy recover.

A separate report showing an increase in consumer confidence signaled that spending could continue to rise. The preliminary Reuters/University of Michigan consumer sentiment index increased more than expected in December.

In another welcome sign, the Commerce Department reported a 0.2 percent gain in business inventories in October, breaking a 13-month streak of declines. That's a signal that businesses expect consumers to step up their purchases.

Hopes of an economic rebound have driven stocks sharply higher for nine months, but the advance has slowed in the past month as investors lock in the year's huge returns and question what catalysts there might be to power the market higher next year.

Stephen Wood, chief market strategist at Russell Investments, said the day's reports help confirm that the economy is on the right track.

"We're going from the first global recession in 70 years to a tepid, but very real global growth story," he said.

The Dow Jones industrial average rose 65.67, or 0.6 percent, to 10,471.50. The Standard & Poor's 500 index gained 4.06, or 0.4 percent, to 1,106.41, while the Nasdaq composite index slipped 0.55, or less than 0.1 percent, to 2,190.31.

Stocks and the dollar seesawed during the week as investors tried to determine where the economy and interest rates are headed. After a stronger dollar sent the Dow down 104 points on Tuesday, stocks rebounded in the final three days of the week.

The Dow rose 0.8 percent for the week, its second straight weekly gain. The S&P 500 index rose for a third straight week, edging up less than 0.1 percent. The Nasdaq slipped 0.2 percent for the week.

Friday's gains in stocks came even as the dollar rose. The ICE Futures US dollar index rose 0.7 percent.

For months, stocks and commodities have moved in the opposite direction of the dollar. The dollar has been falling for much of this year as low interest rates make other assets like stocks and commodities more attractive. A weaker dollar makes commodities cheaper for foreign buyers and helps boost the profits at companies that do business overseas.