Stocks post first weekly gain since April

SAN FRANCISCO — U.S. stocks posted their first weekly gain since April on Friday, with the S&P 500 and Dow industrials ending moderately higher in the face of worries about Europe's debt crisis and a slowdown in the U.S. economy.

The Dow Jones Industrial Average ended the day at 12,004.36, up 42.84 points on the day, and 52.45 points for the week. The index had fallen every week since the end of April.

The S&P 500 added 3.86 points Friday, or 0.3 percent, to end at 1,271.50. That's just 0.52 point higher than its close a week ago, but it was enough to break a six-week losing streak.

Greece's debt crisis dominated headlines during the week. As trading wound down Friday a fresh worry emerged as Moody's Investors Service put Italy's bond ratings on review for possible downgrade, citing challenges in economic growth.

Also making for some choppy trading, Friday was what's known as quadruple witching — when stock-index futures, single-stock futures, equity options and stock-index options for June expire.

"It's typical of quadruple witching to see this volatility, and a while ago Moody's announced that Italy is up for a possible downgrade, causing some selling as the euro sold off," said Peter Cardillo, chief market economist of Avalon Partners.

"We came back up a little so I think it has most to do with the last hour of trading on quadruple witching day," he said.

Stocks started the session with strong gains, boosted by talks between France and Germany on a possible debt deal for Greece and some strength in one of the day's economic indicators.

Ahead of the U.S. market open, German Chancellor Angela Merkel said at a joint news conference with French President Nicolas Sarkozy that they want a quick solution to the Greek debt situation and will work to preserve the stability of the euro. They referred to a "Vienna-style" deal, which some analysts said could be a way to prevent or at least delay a default of Greece's debt.

Risks of a Greek sovereign default, which could hike losses at exposed European banks and ripple across the global financial sector, contributed to six straight weeks of losses as of last Friday. Uncertainty about a resolution will likely dog U.S. markets in coming days, even with a stronger show of cooperation among European leaders in recent days.

"The market will turn higher only if clarity emerges in Greece. It remains to be seen if the crisis can be contained short of default," said Michael Yoshikami, president and chief investment strategist at YCMNet Advisors, in an e-mail interview.

Earlier stocks weathered conflicting U.S. economic reports. A report from the University of Michigan and Thomson Reuters showed a survey of consumer sentiment fell to 71.8 in early June, worse than expected, but the Conference Board's index of leading economic indicators grew a surprisingly strong 0.8 percent in May.