Stocks climb; traders focused on Europe

By msnbc.com news services

Stocks opened higher Friday as optimism over possible coordinated action by major world central banks, if Sunday's Greek vote causes financial turmoil, was offset by a weak reading on domestic manufacturing.

Officials of the Group of 20 leading industrialized nations told Reuters that central banks of major economies would take steps to stabilize markets and prevent a credit squeeze, if necessary.

The news spurred sharp gains late in Thursday's session, and that rally looked to be extended. However, a gauge of manufacturing in New York state fell sharply in June, and while it still showed growth, it was the latest data pointing to a sluggish economy in the U.S.

Investors continued to watch developments in Europe ahead of the Sunday election in Greece, which investors fear may set the nation on a path to an exit from the euro zone. That possibility, along with questions about the effectiveness of a bank bailout plan in Spain, has spurred volatility in a thinly traded week, with the S&P 500 moving more than 1 percent for three of the past four days.

"A coordinated effort to stop a run on the bank is good news, but there's still a lot of uncertainty over the region, so it's possible the slight gains we're seeing now could run out of steam," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

Related: Traders nervously?look to?key weekend in Europe

In economic news, a report showed consumer sentiment fell in early June to a six-month low on worries about deterioration in the jobs market and Europe's festering debt crisis.

An afternoon rally on Thursday erased the S&P's losses for the week. The benchmark index is now up 0.3 percent on the week.

The Wall Street Journal reported late Thursday Microsoft Corp would buy business software company Yammer Inc for $1.2 billion, citing a person familiar with the matter.

China granted conditional approval to U.S. conglomerate United Technologies Corp's $16.5 billion takeover of aircraft parts maker Goodrich Corp, saying Goodrich needed to divest or sell parts of some businesses.

Diamond Foods Inc late Thursday said it had received a letter from Nasdaq saying it had missed the deadline for filing its already-delayed quarterly report, a fact which could lead to the company's delisting from the stock exchange.

Reuters contributed to this report.

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