NEW YORK/LONDON: The euro slipped against the dollar on Friday on increasing concern about the worsening debt crisis in

Portuguese debt yields hit new highs on Friday after Standard & Poor's downgraded its ratings and warned it could cut them again. But the pressure for now did not spread toward other markets.

The downgrade prompted "one of the first major rejections of Portuguese assets," said Kathy Lien, director of currency research at GFT in New York.

"For most of the week the market has treated Portugal as an isolated problem that will not spread to other parts of Europe but this sentiment is losing popularity very quickly."

US stocks rose in early trade after the government reported the US economy grew more quickly than previously estimated in the last quarter of 2010 as businesses maintained fairly solid spending and restocked shelves to meet rising demand.

An optimistic outlook by software maker Oracle fuel hopes that a global resurgence in technology spending remained intact.

"When you get an upward revision in GDP, along with some very good earnings out of Oracle, this will give more confidence that even with uncertainty in the rest of the world, we're on a good footing here, and that will help stocks," said Elizabeth Miller, president of Summit Place Financial Advisors in Summit, New Jersey.

Equity volumes have dwindled in the US and other markets including Europe, as violence in the Middle East and northern Africa coupled with Japan's natural disasters two weeks ago and its ongoing nuclear crisis to cloud the outlook for the global economic recovery.

The Dow Jones industrial average gained 22.78 points, or 0.19 percent, to 12,193.34.

The Standard & Poor's 500 Index rose 0.95 points, or 0.07 percent, to 1,310.61.

The Nasdaq Composite Index added 4.38 points, or 0.16 percent, to 2,740.80.

The MSCI All-Country index was up 0.1 percent and was on track to post its best week in nearly four months.

European shares traded near break-even as bullish signs on the economy and corporate results were tempered by the euro zone debt problems and violence in Libya.

Portugal's president consulted political leaders on Friday on whether to call a snap election after the Socialist prime minister resigned after a reform was kicked down in parliament.

The crisis could force Lisbon to request a bailout from the European Union and International Monetary Fund, becoming the third euro zone country to seek aid, after Greece and Ireland.

The yield on 10-year Portuguese government bonds rose to a new euro-era high above 8 percent, well above the level which the government says is sustainable, and the premium to hold its 10-year debt rather than Germany's widened to 474 basis points.

The euro was last down 0.3 percent at $1.4128, having earlier hit a session low of $1.41133 on trading platform EBS.

Traders reported option barriers around $1.4250 and said the level will be strongly defended.

Technical analysts said a weekly close above $1.4200 would leave it well positioned for a further rise.

The yen traded near 81 per dollar, a level it has clung tightly to all week since a rare coordinated intervention by leading central banks last Friday to curb its appreciation.

Higher-yielding currencies gained as the global economic outlook boosted risk appetite and on growing demand for dollar-funded carry trades.

The higher-yielding Australian dollar hit a 2011 high of $1.0255, just shy of its 29-year peak of $1.0257.

Traders cited stops above $1.0260, with option expiries at $1.0200. Traders said model funds were adding to long positions in the currency as were real money accounts.

Oil ticked lower for the day but both US crude and Brentwere on track to post healthy weekly gains.

Investors were keeping a close eye on protests in Yemen, Bahrain and on Syria.

"So long as ongoing problems in the Middle East continue to elevate risks of a further supply disruption, there is a strong likelihood of a price spike in the second quarter," said J.P. Morgan analysts headed by Lawrence Eagles.

Spot gold held steady below the previous session's record highs, as worries over euro zone's debt crisis and Middle East turmoil supported sentiment.

Japan's Nikkei index rose 1.1 percent to post its best week since November as foreign investors scooped up battered shares. In the previous two weeks, the Nikkei had lost nearly 14 percent.