Stocks closed slightly higher Friday after a positive consumer-sentiment report helped ease investors' concerns about new data that hinted inflation could remain a problem for the Federal Reserve next year.

Indexes had started the day lower as traders reacted to Commerce Department figures showing that prices for services continued to climb faster than hoped last month. Those numbers sent bond prices lower and kept the Nasdaq and S&P 500 on course for a third straight week of declines.

But the indexes pared some of the week's losses after the midmorning release of the University of Michigan's consumer survey showed that households are still optimistic about the economy.