Wall Street stocks ended the week higher as trade was boosted by a brighter outlook for 2011, and with next week expected to see more gains as traders take positions ahead of the year's end.

News on Tuesday that President Barack Obama and his Republican foes struck a deal to extend a controversial tax cuts was greeted with relief on Wall Street, even though the plan still faces massive hurdles in Congress.

Economists forecasted the cuts would boost the US economy as Americans will have more money to invest in the market, with many analysts estimating gross domestic product to grow next year by 0.5 to one percentage point to around three percent.

Sentiment was further boosted Friday after the Commerce Department reported the US trade deficit surprisingly narrowed sharply in October to the smallest gap since January, thanks to a surge in exports under-

pinned by a weaker dollar.

"These were two data points that merely add to the tailwinds that the market has been experiencing for the last several months," said analayst Michael James of Wedbush Morgan Securities.

"People are coming to the realization that the economy is likely to be stronger next year, and that is why you've seen a continued optimism about equities," he toldAFP.

"It has been very hard for any data point over the last several weeks to sell the market off, whether it be domestic data points or sovereign debt fears from a couple of weeks ago regarding Ireland."

In the week to Friday, the Dow Jones Industrial Average rose 0.25 percent to 11,410.32.

The broader S&P 500 index added 1.28 percent to 1,240.40 points, its highest level in more than two years, while the technologyrich Nasdaq composite index rose 1.78 percent to2,637.54points, a fresh three-year high.