The Dow and S&P 500 edged up on Friday after France and Germany reached an outline agreement to aid debt-burdened Greece, but the Nasdaq declined and analysts said a recent bearish trend may not be over.
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France and Germany said they would ask that banks holding Greek debt voluntarily shoulder some of the burden. Meanwhile, Greece's prime minister appointed a new finance minister to try to push through harsh economic reforms.
The debt crisis seemed to escalate this week as Moody's Investors Service said it may cut the credit ratings of French banks, citing exposure to Greek debt.
We're just in very jittery market sentiment right now, said Natalie Trunow, chief investment officer of equities of Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.
People are finally starting to connect the dots between the sovereign debt crisis and the potential impact on some of the larger companies involved in those countries and some of the banks, she added.
The Dow Jones industrial average <.DJI> rose 34.78 points, or 0.29 percent, at 11,996.30. The Standard & Poor's 500 Index <.SPX> put on 2.87 points, or 0.23 percent, at 1,270.51. The Nasdaq Composite Index <.IXIC> was down 7.62 points, or 0.29 percent, at 2,616.08.
The S&P financial index <.GSPF> was up 0.7 percent for the day, but is down 7 percent since the start of the year.
If the S&P 500 and Dow hold on to gains, they would record their first positive week in seven. The S&P 500 is almost 7 percent below a three-year high hit early last month.
Many on Wall Street think it's likely the S&P 500 will test its 2011 low near 1,250.
Also providing market support, a key measure of future U.S. economic activity rose more than forecast in May to a record high.
But U.S. consumer sentiment worsened on renewed concerns about the outlook for the economy.
(Additional reporting by Rodrigo Campos; reporting by Caroline Valetkevitch; editing by Jeffrey Benkoe)