The rating agency Standard & Poor's warned late Thursday to downgrade US triple-A credit ratings if the policy makers failed to reach a deal to raise the government's debt ceiling, which exerted downward pressures on the market.
Friday's data came in mixed, providing little boost to the market. The Labour Department said Friday that the CPI (consumer price index) fell 0.2 percent because of a decline in gas prices.
A separate report showed US consumer sentiment slipped in July to its lowest level since March 2009.
However, traders were still encouraged by better-than-expected corporate earnings.
Citigroup reported that its net income rose 24 percent in the second quarter to $3.3 billion, or 1.09 cents per share, on revenues of $20.6 billion, beating Wall Street forecast.
Google surged about 13 percent after the search giant beat the most bullish forecasts late Thursday, making driving the tech- heavy Nasdaq prominently higher in three major indexes.
The Dow Jones industrial average gained 42.61 points, or 0.34 percent, to 12,479.73. The Standard & Poor' s 500 was up 7.27 points, or 0.56 percent, to 1,316.14. The Nasdaq Composite Index rose 27.13 points, or 0.98 percent, to 2,789.80.