US STOCKS-Wall St higher as dollar lifts commodities

* Dollar falls while oil prices advance, euro gains

* G8: recovery more "self-sustained," commodities a threat

* Indexes higher: Dow 0.4 pct, S&P 0.4 pct, Nasdaq 0.3 pct

* For up-to-the-minute market news see [STXNEWS/US]

(Updates to open)

By Ryan Vlastelica

NEW YORK, May 27 (Reuters) - U.S. stocks were higher on Friday as bullish comments about Greece caused the dollar to fall, resulting in strength in commodity prices.

The U.S. dollar index <.DXY> fell 0.5 percent as the euro rose following comments from European Central Bank Governing Council member George Provopoulos, who said Greece could handle its debt if it sticks to its aid program.

The dollar helped lift commodity prices, and oil gained 0.6 percent. The S&P Energy index <.GSPE> rose 0.6 percent while Occidental Petroleum added 1.5 percent to $106.60.

This has been a choppy week for equities, with steep losses early offset by a rally in the past two days. The S&P 500 is down 0.6 percent for the week. Trading volume could be anemic on Friday ahead of Monday's Memorial Day holiday.

The losses early in the week came on worries about euro-zone sovereign debt, as well as concerns that global demand was slowing. While there are few catalysts seen for strong positive advances, technical support suggests there is a floor for stocks.

"We're having a little bit of a snap-back rally given the stretch of selloffs we had earlier this week," said Doug Godine, head of institutional sales and trading at Signal Hill Capital in Baltimore. "I don't think there will be a lot of volume today, as no one is going to make any huge bets going into the holiday weekend."

The Dow Jones industrial average <.DJI> was up 51.16 points, or 0.41 percent, at 12,453.92. The Standard & Poor's 500 Index <.SPX> was up 5.40 points, or 0.41 percent, at 1,331.09. The Nasdaq Composite Index <.IXIC> was up 7.82 points, or 0.28 percent, at 2,790.74.

The Group of Eight leaders agreed on Friday that the global economic recovery was becoming more "self-sustained," though higher commodity prices were hampering further growth. For details, see [ID:nLDE74Q0CZ]

Medco Health Solutions Inc will lose a major pharmacy benefit contract starting next year. The Blue Cross Blue Shield Association will move its mail order and specialty pharmacy benefit coverage to CVS Caremark under a three-year contract.

Medco shares fell 10 percent to $57.75 while CVS rose 3.2 percent to $39.35. [ID:nN27298204] [ID:nASA028CD]

(Editing by Kenneth Barry)