* Retailers in focus on busy Black Friday shopping day
* Greece says IMF relaxes debt-cutting target
* RIM shares surge on new product optimism
* Indexes up: Dow 0.9 pct, S&P 0.9 pct, Nasdaq 1 pct
By Leah Schnurr
NEW YORK, Nov 23 (Reuters) - Wall Street rose on Friday on signs of progress in talks about releasing aid to Greece and as investors bid up retail shares on hopes consumers will scoop up bargains on Black Friday, which heralds the start of the holiday shopping season.
U.S. equity market trading will end early at 1:00 pm ET (1800 GMT) after closing Thursday for the Thanksgiving holiday. With many investors on holiday, trade volume got off to a slow start.
Greece said the International Monetary Fund had relaxed its debt-cutting target for the country, suggesting lenders were closer to a deal for a vital aid tranche to be paid. But other sources involved in the talks cautioned the funding gap was far bigger than Greece has suggested.
Euro zone finance ministers, the IMF and European Central Bank (ECB) failed earlier this week to agree on how to get the country's debt down to a sustainable level and will have a third attempt at resolving the issue on Monday.
"Anything positive out of Europe related to the sovereign debt ... that can act as a catalyst," said Todd Salamone, director of research at Schaeffer's Investment Research in Cincinnati, Ohio.
The S&P 500 looked likely to break a two-week losing streak, having gained more than 3 percent this week so far. Stocks had tumbled earlier in the month on worries about the impact of tax and spending changes to take effect from January, but hopes that politicians will reach a deal to avert the so-called fiscal cliff helped the market recoup some of those declines this week.
The index also broke back above the 1,400 level, which could provide support.
The Dow Jones industrial average gained 112.71 points, or 0.88 percent, to 12,949.60. The Standard & Poor's 500 Index rose 12.34 points, or 0.89 percent, to 1,403.37. The Nasdaq Composite Index climbed 30.32 points, or 1.04 percent, to 2,956.88.
The retail sector rose as investors looked for signs of how much consumers are spending as stores lured them with Black Friday deals and discounts.
Black Friday, the day after Thanksgiving, kicks off the U.S. Christmas shopping season for retailers and is often the busiest shopping day of the year. The National Retail Federation expects sales during the holiday season to grow 4.1 percent this year.
Shares of electronics retailer Best Buy Co were up 1.6 percent at $11.76, while J C Penney gained 1.6 percent to $17.53.
Big-name technology companies also climbed as investors added to positions on a day of thin trading.
Microsoft helped lift the Nasdaq, gaining 1.7 percent to $27.41, while Oracle rose 1.2 percent to $30.76.
"Anyone that was on the sidelines waiting for a pullback like the one we just had in some of the tech names, they're looking for any glimpse of strong price action for permission to enter into those (stocks)," said Salamone.
Research in Motion surged on optimism about its soon-to-be-launched BlackBerry 10 devices that will vie against Apple's iPhone and Android-based smartphones. RIM was up 12 percent at $11.49.