US stocks reverse losses as housing starts surge

US stocks managed to reverse early losses on Friday to finish the session up. The S&P 500 rose 0.4 percent, erasing its loss for the week.

Stock market gains on Friday were supported by strong housing data. A report from the Commerce Department showed that housing starts surged 13.2 percent in April. Building permits rose 8.0 percent.

Consumer sentiment data on Friday, however, were negative. The preliminary May reading of the Thomson Reuters/University of Michigan consumer sentiment index came in at 81.8, down from a nine-month high of 84.1 in April.

Economists, however, appear to have become more confident about the US economy. Data from the Philadelphia Federal Reserve's quarterly survey of 42 forecasters released on Friday showed that economists have raised their forecast for second quarter growth to 3.3 percent from 3.0 percent.

The third-quarter growth forecast was raised to 2.9 percent from 2.8 percent and the fourth-quarter growth forecast was raised to 3.2 percent from 2.7 percent.