* Construction spending up, manufacturing growth picks up
* April consumer spending flat
* Intel falls on Altera buy, weighs on Nasdaq, Dow and S&P
* Microsoft jumps on report of German startup buy
* Indexes up: Dow 0.4 pct, S&P 0.4 pct, Nasdaq 0.5 pct (Updates to early afternoon)
By Tanya Agrawal
June 1 (Reuters) - U.S. stocks were higher in afternoon trading on Monday, erasing slender losses in choppy trading earlier in the session, as investors digested a flurry of data that painted a mixed picture on the pace of the economy's recovery.
Data from ISM showed that the pace of manufacturing growth rose in May. Other data showed construction spending surged in April, but consumer spending was unexpectedly flat.
The data left investor's with a mixed view about the strength of the economy's recovery from the first-quarter's slump as they try to gauge when the Federal Reserve will ultimately raise interest rates.
With little evidence of a rebound, the Fed is in no position to start raising interest rates for the first time since 2006, Boston Fed President Eric Rosengren said.
"We're seeing a lot of counter trends in the market," said Rick Fier, director of trading at Conifer Securities in New York. "One thing this market hasn't been seeing is inflows which gets put to work."
Fier said the mixed data, rumors about Greece reaching a deal and volatility in currencies and bond yields added to the choppiness.
Amid mounting worries of a Greek default, Athens missed a self-imposed Sunday deadline to reach an agreement to unlock aid, the same day Economy Minister George Stathakis said he expected a deal in "a few days".
At 13:11 p.m. ET (1711 GMT) the Dow Jones industrial average was up 71.26 points, or 0.4 percent, at 18,081.94, the S&P 500 was up 8.12 points, or 0.39 percent, at 2,115.51 and the Nasdaq Composite was up 23.48 points, or 0.46 percent, at 5,093.50.
Eight of the 10 major S&P indexes were higher. The health index was the biggest gainer with a 0.68 percent rise, led by Bristol-Myers' 3.6 percent rise to $66.91 after the FDA accepted its application for a combination melanoma treatment.
Intel fell 1.3 percent to $34.01 and was the biggest drag on the three major indexes after the company agreed to buy programmable-chip maker Altera for $16.7 billion. Altera rose 6 percent to $51.79.
Microsoft was the Dow's biggest gainer with a 1.6 percent increase to $47.65, doubling its gains after the Wall Street Journal reported the company bought a German startup. on.wsj.com/1AG0XDt
Disney rose 0.9 percent to $111.41 after Barron's said the stock could climb 50 percent over the next three years. Disney also said its CFO had resigned.
Immunogen surged 64.3 percent to $14.74, leading a rally in cancer drug makers' stocks after they presented positive data at a conference.
Advancing issues outnumbered decliners on the NYSE by 1,878 to 1,136, for a 1.65-to-1 ratio on the upside. On the Nasdaq, 1,600 issues rose and 1,116 fell for a 1.43-to-1 ratio favoring advancers.
The S&P 500 index showed 13 new 52-week highs and six new lows while the Nasdaq recorded 90 new highs and 41 new lows. (Editing by Savio D'Souza)