Wall St gains on economic data, Wal-Mart

NEW YORK (Reuters) - Stocks rose on Wednesday in thin volume after a flurry of data showed the economy was weak, but not as bad as feared, and Wal-Mart's shares advanced after it said it had settled 63 class-action wage lawsuits.

A government report showed U.S. consumers cut spending for the fifth straight month in November and their incomes shrank, pointing to deeper recessionary pressures. Spending fell 0.6 percent and personal incomes slipped 0.2 percent, the Commerce Department said. Economists polled by Reuters had expected spending to drop 0.7 percent and forecast flat incomes.

Durable goods orders fell 1 percent in November -- less than the decline of 3 percent forecast in a Reuters poll.

"We're certainly in a period where you are going to see weak economic data and we will see that for awhile," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

"But it is a financial system that can recover with stocks that have some value."

The Dow Jones industrial average <.DJI> rose 36.56 points, or 0.43 percent, to 8,456.05. The Standard & Poor's 500 Index <.SPX> was up 3.15 points, or 0.36 percent, to 866.31. The Nasdaq Composite Index <.IXIC> inched up 0.84 of a point, or 0.06 percent, to 1522.38.

Volume is light in the abbreviated session. New York's regular trading session will end at 1 p.m.

Shares of Dow component Wal-Mart Stores Inc rose 0.3 percent to $55.46 after the world's largest retailer said late Tuesday that it had settled 63 class-action lawsuits. Wal-Mart said the suits had accused the company of wage violations and the litigation was settled for a minimum of $352 million, but no more than $640 million.

The stock of Wal-Mart rival Target Corp. , one of the largest U.S. discount retailers, was up 2.4 percent at $32.70 on Christmas Eve, when some shoppers are still heading out to stores to take advantage of last-minute bargains on gifts. An S&P index of retailers' shares <.RLX> was up 1.2 percent.

Data from Freddie Mac, one of the largest U.S. home funding companies, showed U.S. mortgage rates had dropped to the lowest in 37 years in the week ending December 24.

An S&P index of financial shares <.GSPF> was up 0.6 percent, with Dow component JPMorgan Chase & Co up 1 percent at $29.41.

Cheaper oil prices, which could help businesses and consumers with lower energy costs, also may have helped improve investors' mood in the holiday-shortened session.

U.S. crude oil futures for February tumbled $1.53, or almost 4 percent, to $37.45 a barrel after data showed crude oil stockpiles fell unexpectedly in the latest week, but inventories of refined fuels increased.

Although lower oil prices have prompted some selling of energy stocks in the past several sessions, the reverse was true on Wednesday. Exxon Mobil rose 0.7 percent to $75.61 and Chevron added 0.3 percent to $69.37.

On the Nasdaq, Google shares advanced 2.2 percent to $304.50 and helped the tech-heavy index cling to a tiny gain.

Among the gloomy economic data released this morning, a Labor Department report measuring initial applications for unemployment benefits showed a 30,000 jump last week to a 26-year high of 586,000 versus the 556,000 in the previous week.

After the U.S. stock market's early close on Christmas Eve, there will be just four trading days left in the year. The broad S&P 500 is down about 41 percent for the year. That decline for the year is surpassed only by the 47.1 percent fall in 1931 during the Great Depression.

Volume is expected to be scant throughout the week shortened by the Christmas holiday. U.S. markets will be closed on Thursday for Christmas Day.

(Additional reporting by Vivianne Rodrigues, Editing by Jan Paschal)

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