Stocks jumped at the open on Friday after French President Nicolas Sarkozy hinted at a deal to resolve the Greek debt crisis that has hampered equities and worried investors over a possible credit dry-up.
Sarkozy said there was no time to lose on agreeing on a program for Greece, suggesting a deal needed to be reached in July at the latest.
We want to go as quickly as possible without fixing a date, Sarkozy said after meeting with German Chancellor Angela Merkel, adding that the pair had the same position on Greece.
Both leaders said they were united behind a new aid package for Greece in which banks that hold Greek debt would voluntarily shoulder some of the burden.
Analysts saw his comments as a balm for spooked investors.
To convince existing Greek bondholders to buy new Greek debt is going to be a gargantuan process, said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.
But the market will deal with that later. For today they're just happy that the French, Germans and the ECB look like they're coming to some sort of an agreement.
The Dow Jones industrial average <.DJI> gained 85.60 points, or 0.72 percent, to 12,047.12. The Standard & Poor's 500 Index <.SPX> rose 10.50 points, or 0.83 percent, to 1,278.14. The Nasdaq Composite Index <.IXIC> added 19.84 points, or 0.76 percent, to 2,643.54.
If the S&P 500 and Dow hold on to gains, the indexes would record their first positive week in seven.
Economic data on tap includes the Reuters/University of Michigan Surveys of Consumers preliminary June consumer sentiment index, due at 9:55 a.m. EDT. Economists in a Reuters survey expect a reading of 74.0 compared with 74.3 in the final May report.
(Reporting by Rodrigo Campos; additional reporting by European bureaus; editing by Jeffrey Benkoe)