GREEK CRISIS: Germany softened its stance on giving Greece more financial support on Friday, offering a possible solution for Greece’s debt crisis.

TECH DROPS: BlackBerry maker Research In Motion Ltd. plummeted 21 percent after giving a surprisingly weak forecast for the current quarter and the remainder of the year. Other technology companies like Intel Corp. and Cisco Systems Inc. fell 0.3 percent, the biggest drop among the 10 industries that make up the S&P index.

THE INDEXES: The Dow closed up 42.84, or 0.4 percent, at 12,004.36. The Standard & Poor’s 500 index rose 3.86, or 0.3 percent, to 1,271.50. The Nasdaq lost 7.22, or 0.3 percent, to 2,616.48.

Stocks are trading higher after European governments signaled that they are closer to a deal for more emergency loans to Greece.

A default by Greece would be disastrous for global markets, and could push other European nations into their own debt crises. Friday’s news makes that less likely.

Two major indices are on track to shake off a six-week losing streak, the longest since 2002. If the Dow Jones industrial average closes higher, that will be its first weekly gain since late April.

Just before noon, the Dow Jones industrial average is up 75 points, or 0.6 percent, at 12,037. The Standard & Poor’s 500 index is up 8, or 0.6 percent, at 1,275. The Nasdaq composite index is up 6, or 0.2 percent, at 2,630.

NEW YORK – Stocks are closing mixed following better-than-expected reports on home building and jobs.

The Dow Jones industrial average rose 64 points, or 0.5 percent, to close at 11,962 on Thursday. The Dow is now slightly higher for the week.

The S&P 500 rose 2, or 0.2 percent, to 1,267. The Nasdaq composite lost 8, or 0.3 percent, to 2,624.

The pace of new home construction quickened last month and the number of people who applied for unemployment benefits fell last week to 414,000, more of an improvement than economists expected. Weekly applications for unemployment have been over 400,000 since April, a rate that suggests job growth is still slow.

Falling stocks outpaced rising ones by a small margin on the New York Stock Exchange. Trading volume was 4.1 billion shares.

NEW YORK – Better-than-expected reports on home building and the job market are putting stock indexes on track for their first weekly gains in a month and a half.

The pace of construction of new homes quickened last month, the government said Thursday. And the number of people who applied for unemployment benefits last week fell to 414,000. That was more of an improvement than analysts had predicted.

Home Depot rose 2.3 percent following the housing report, the most of the 30 stocks that make up the Dow Jones industrial average.

The Dow is up 73 points, or 0.6 percent, to 11,970 in midday trading. The S&P 500 is up 6, or 0.5 percent, to 1,272. The Nasdaq composite is up 8, or 0.3 percent, to 2,638.

NEW YORK (Reuters) – The Dow and the S&P were on track to post their sixth consecutive weekly drop for the first time since mid-2008 on Friday as China’s weaker trade data and disputes about a second bailout of Greece escalated concerns about the global economic slowdown.

The previous day’s stock market rally ended a six-day losing streak, but the advance was short-lived as many analysts had predicted.

The Nasdaq, which wiped out its yearly gains earlier in the session, was just slightly positive. In late trading, the Dow rose back above the 12,000 mark.

Stocks that rebounded on Thursday — mainly cyclical sectors such as financials and commodities — resumed their decline and ranked among Friday’s biggest losers. A string of sub-par U.S. economic data in the past few weeks has turned investors away from risk assets.

Reflecting the bearish sentiment, options traders eyed calls on the CBOE Volatility Index (.VIX), Wall Street’s so-called fear gauge, which moves inversely to the performance of the S&P 500. The VIX was up 3.4 percent at 18.38.

The Dow Jones industrial average (.DJI) was down 112.47 points, or 0.93 percent, at 12,011.89. The Standard & Poor’s 500 Index (.SPX) was down 10.75 points, or 0.83 percent, at 1,278.25. The Nasdaq Composite Index (.IXIC) was down 24.41 points, or 0.91 percent, at 2,660.43.

The S&P 500 has fallen about 7 percent from its intraday peak early last month. Many see the benchmark index sliding back to around 1,250, its March low, where valuations could bring investors back into equities.

“Could sellers overwhelm the buyers for awhile? It’s possible, but once we get down to the correction level in March, I think the market will hold,” said Robert Lutts, president and chief investment officer of Cabot Money Management in Salem, Massachusetts.

At 1,250, the S&P 500 would be roughly 2 percent below current levels and approaching a 10 percent decline commonly referred to as a correction.

Bank stocks ranked among the top decliners. The Federal Reserve said it plans to expand the number of banks it will subject to annual tests used to determine if stock dividends can be increased and whether an institution is holding enough capital.

The KBW regional banks index (.KRX) fell 0.7 percent.

“It’s an incremental negative that makes it easier to be negative and sell any financial stocks right now,” said Michael James, senior trader at Wedbush Morgan in Los Angeles.

“The financial stocks have been a big weight and an underperformer all year so the path of least resistance in the financials continues to be lower.”

The S&P energy index (.GSPE) was down 1.5 percent while the S&P index of industrial stocks (.GSPI) lost 1.1 percent.

China’s sales to the United States and the European Union slumped to their weakest since late 2009, excluding Lunar New Year holidays, underlining the view that the world economy is stumbling.

In another negative for U.S. stocks, the euro tumbled more than 1 percent against the U.S. dollar as fears about Greece’s debt returned to the forefront and investors curbed expectations about the European Central Bank’s interest-rate hikes. Investors have been recently trading the correlation between stocks and the dollar.

The PHLX semiconductor index (.SOX) slid 1.3 percent, sinking to its lowest since early December. The SOX fell below its 200-day moving average for the first time since last October.

(Reporting by Angela Moon; Editing by Jan Paschal)

NEW YORK (Reuters) – Stocks ended a second week of losses on a down note Friday, reflecting growing worries that stocks are on the precipice of a pullback.

Concern about slowed growth worldwide, the coming end of a supportive Federal Reserve policy and the fear of a worsening euro-zone debt crisis are undermining the stock market’s ability to maintain an upward direction.

This sentiment was present not just in stocks but also was reflected in a sharp drop in the euro. Stocks and the euro have been trading in a similar pattern for most of the week and particularly on Friday, when a late-morning drop in stocks coincided with a sharp fall in the euro.

Financial stocks took the biggest hit, with the S&P Financial Index (.GSPF) falling 1.5 percent.

Recent heavy selling in commodities has prompted several money managers to forecast a pullback by stocks, noting that much of the stock market’s latest advance has been built on commodity-related stocks.

“I think this is the first thrust in what’s likely to be a correction in the stock market,” said James Dailey, a portfolio manager at TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

“But the epicenter of that correction is likely to be in what’s already been correcting most severely, which is the commodity-related area.”

The Fed’s second round of quantitative easing has been credited for much of the strength in stocks and commodities since September 2010. The $600 billion bond-buying program is set to end in June.

“QE2 was perceived to be a big help from a stimulative standpoint, and markets have reacted very favorably to that,” said Natalie Trunow, senior vice president and chief investment officer of equities at Calvert Investment Management Inc in Bethesda, Maryland, which manages about $14.8 billion.

“It is also apparent the Fed is unlikely to proceed with QE3, so as QE2 stops that signifies an effective tightening,” she said.

The Dow Jones industrial average (.DJI) ended down 100.17 points, or 0.79 percent, at 12,595.75. The Standard & Poor’s 500 Index (.SPX) finished down 10.88 points, or 0.81 percent, at 1,337.77. The Nasdaq Composite Index (.IXIC) fell 34.57 points, or 1.21 percent, at 2,828.47.

For the week, the Dow was down 0.3 percent, the S&P 500 was off 0.2 percent and the Nasdaq was barely up at 0.03 percent.

Dailey said because of a weaker outlook for global industrial demand, his firm is lightening up or hedging position in commodity-related areas, including industrial metals.

He sees a stock market correction of between 6 percent and 8 percent from the highs in the Dow and S&P 500.

The CBOE Volatility Index (.VIX), used as an indicator of investor fear, ended up 6.5 percent.

In another sign of a shift in sentiment, leadership in the S&P 500 has moved from cyclical sectors like energy and basic materials to sectors with more stable growth like healthcare and utilities.

The S&P energy index (.GSPE) was down 1.4 percent for the week, and down 8.3 percent for the month to date, while the iShares Silver Trust exchange-traded fund (SLV.P) was down 0.2 percent for the week and 26.7 percent for the month to date.

Technology shares were also among the hardest hit in the session. Yahoo Inc (YHOO.O) shares fell 3.6 percent to $16.55 after the Internet company said the Alibaba Group restructured the ownership of Alipay, one of China’s largest online payment businesses, without the knowledge of Yahoo and Softbank, two of its stakeholders.

About 6.88 billion shares were traded on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with the average of 7.73 billion so far in 2011.

Declining stocks outnumbered advancing ones on the NYSE by about 7 to 3 and on the Nasdaq by a ratio of about 10 to 3.

(Reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

NEW YORK (Reuters) – U.S. stocks capped a third straight week of gains on Friday as encouraging earnings helped the market sustain upward momentum, led by Baidu Inc (BIDU.O), the latest tech company to beat estimates.

The market has defied expectations for a pullback following a strong rally prior to the earnings season. Some investors were expecting the results to provide an excuse for broad profit-taking.

“To get decent earnings after a nice little rally in the market and have the market sustain the gains or even achieve a little more is a really good thing and bodes well,” said Robert Stimpson, a fund manager at Oak Associates in Akron, Ohio.

Volume was very light after nearly two weeks of more active trading. Just 5.76 billion shares were traded on the NYSE, Amex and Nasdaq. The daily average this year has been around 8.8 billion shares.

Earnings in the technology sector, the S&P’s largest, have been particularly strong. Profit at Baidu, the Chinese Web search engine, beat Wall Street estimates and the company forecast strong demand ahead. Baidu’s shares rose 4.6 percent to $107.28.

The Dow ended lower, weighed down by American Express (AXP.N) whose shares slipped as regulatory issues overshadowed rising profit. Verizon Communications Inc (VZ.N) also fell after it said additions of new wireless customers may lag.

The Dow Jones industrial average (.DJI) dropped 14.01 points, or 0.13 percent, to 11,132.56. The Standard & Poor’s 500 Index (.SPX) gained 2.82 points, or 0.24 percent, to 1,183.08. The Nasdaq Composite Index (.IXIC) gained 19.72 points, or 0.80 percent, to 2,479.39.

For the week the Dow and the S&P 500 each rose 0.6 percent, while the Nasdaq climbed 0.4 percent.

Technology has led gains in the recent rally. The Nasdaq is up more than 17 percent since the end of August compared with the S&P 500, which is up 12.7 percent. The Nasdaq closed just shy of its highest level since May on Friday.

Early reports from technology companies have given a mostly rosy picture of the sector’s future, including Google’s (GOOG.O) much stronger-than-expected earnings a week ago. Baidu late Thursday gave a robust outlook for its business.

Also boosting the Nasdaq were shares of online retailer Amazon.com Inc (AMZN.O), which gained 2.5 percent to $169.13 after Wall Street analysts raised their price targets on the company, even as Amazon gave a disappointing forecast on Thursday.

Shares of American Express declined 3 percent to $39.03 while Verizon lost 1.3 percent to $32.09.

Also on the down side, Leggett & Platt Inc (LEG.N) posted a lower-than-expected quarterly profit, hurt by weakness in its residential furnishings market. The company also forecast 2010 earnings below market expectations. The shares lost 8.6 percent to $21.01.

The S&P 500 sent a bullish signal as the index’s 50-day moving average crossed above its 200-day moving average, known as a golden cross. That upward momentum indicator last occurred in June 2009, and the benchmark index rose more than 35 percent in the following 10 months.

However, the bullish signal doesn’t always signal an up market, says Chris Burba, short-term market technician at Standard & Poor’s in New York.

“If you get a golden cross when the market has been consolidating for a while, you have a much higher probability the market is going to take off,” he said.

Two top Federal Reserve officials gave contrasting views on the need for more stimulus for the U.S. economy.

Growing speculation in recent weeks that the Fed will extend the quantitative easing measures at its next meeting in November has pressured the dollar while boosting equities.

Equities have recently traded in tandem with the euro, with S&P futures rising along with Europe’s single currency.

(Reporting by Edward Krudy; Editing by Kenneth Barry)

NEW YORK – Stock futures fluctuated in a narrow range and investors were buying bonds Thursday, indicating they are cautious ahead of a key weekly reading on unemployment.

The strength in the bond market again drove interest rates lower. Traders are uncertain about the strength of the economy, but could get a better idea about it with the government’s latest reading on new claims for unemployment benefits due out Thursday.

The Labor Department is expected to report initial claims for unemployment benefits fell by just 10,000 to 490,000 last week, according to Thomson Reuters. That would snap three straight weeks of rising claims, but still fall well short of where claims need to be to indicate significant hiring. The report is due out at 8:30 a.m. EDT.

The report one week ago on unemployment claims sent the market into a downward spiral that did not end until some late-day buying propped up stocks Wednesday. The Labor Department said in its report last week that initial claims jumped to 500,000, the highest level since November.

In a healthy economy where jobs are being added regularly, claims usually fall below 400,000. At the height of the recession in March 2009, weekly claims peaked at 651,000.

High unemployment remains the biggest obstacle to a stronger recovery because people worried about their jobs have cut back on spending. Companies have been slow to hire because of uncertainty surrounding tax, financial regulation and health care reform costs as well as worries about consumer demand.

Most major economic indicators have pointed to flagging growth in recent months, with jobs data the most obvious sign of that slowdown. Some traders are worried that growth will continue to slow during the second half of the year so much that the country will fall back into recession.

Ahead of the opening bell, Dow Jones industrial average futures fell 2, or less than 0.1 percent, to 10,045. Standard & Poor’s 500 index futures was unchanged at 1,054.60, while Nasdaq 100 index futures rose 0.75, or less than 0.1 percent, to 1,790.50.

The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.50 percent from 2.54 percent late Wednesday. Its yield is often used to set interest rates on mortgages and other consumer loans.

Long-term bond yields are hovering around levels not recorded since early 2009 when the country was in the depths of the recession and stocks hit 12-year lows.

Low interest rates usually help to drive new growth because it makes it cheaper to borrow and buy everything from clothes to cars to houses. But right now, that isn’t even encouraging shoppers because they are worried about jobs and opting to save instead.

European markets got a lift from an upbeat report on Germany’s economy. A forward-looking consumer confidence reading in Germany rose as that company’s economy rebounds better than was anticipated. Germany’s DAX index rose 0.2 percent. France’s CAC-40 climbed 0.5 percent and Britain’s FTSE 100 rose 0.4 percent.

BIG WEEK: The Dow Jones industrial average rose 59 points Friday, putting its gain for the week at 5.3 percent. That the biggest weekly climb in about a year.

EARNINGS OUTLOOK: Investors bid up stocks of companies that start to report earnings for the April-June quarter next week. Alcoa Inc. shares rose 2.1 percent.

LIGHT DAY: Trading volume was light Friday, as it had been all week. That suggests many skeptical investors are staying out of the market.

GOLD RUSH: Shares of minerals and mining companies gained after gold prices settled at a record high for the second straight day. Barrick Gold and Newport Mining were among the big gainers.

A GOOD WEEK: The Dow posted its second straight weekly gain, following three weeks of declines. The Dow rose 16 points Friday, its fourth consecutive gain

COMPANY NEWS: CVS and Walgreen rose after settling a contract dispute over pharmacy prescriptions. Caterpillar, a Dow component, rose after reporting sharply higher sales.