LONDON – European stocks traded in a narrow range Friday as investors warily awaited the completion of a Greek support package and looked ahead of U.S. economic figures set to show the world's largest economy continuing to grow solidly.
In Europe, the FTSE 100 index of leading British shares was down 11.42 points, or 0.2 percent, at 5,606.42 while France's CAC-40 index fell 13.08 points, or 0.3 percent, to 3,827.54. Germany's DAX was up 26.95 points, or 0.4 percent, at 6,171.86.
Once again, most attention in the markets remains on the Greek debt crisis — while most investors expect a bailout loan package to be agreed by this weekend, there have been so many shocks and delays in this crisis that they remain reluctant to get too euphoric.
"The situation remains tense with bonds and equities likely to whipsaw until a formal arrangement has been negotiated," said Jeremy Batstone-Carr, director of private client research at stockbrokers Charles Stanley.
Greece has to find euro8.5 billion to pay off debtors on May 19 and the way the bond markets are at the open — especially after Standard & Poor's downgraded the country's debt to junk status earlier this week — Greece is relying on getting the money from its 15 partners in the eurozone and the International Monetary Fund.
Mounting fears that Germany might hold up its share of the overall euro45 billion bailout package agreed earlier this month was the catalyst to this week's market turmoil.
The consensus in the markets now is that a much more extensive package will be offered to Greece than the original one-year euro45 billion deal agreed — that has helped to shore up confidence in the markets and Europe's main stock indexes have advanced while the euro has clambered off its recent lows.
Confirmation of a deal could well come over the long weekend — Europe's main markets are closed Monday for the May Day holiday.
Even if Greece gets the money, it has years of painful austerity ahead.
Greek Prime Minister George Papandreou said Friday that more needs to be done.
"There is still a long way to go before Greece's ails are healed," said Jane Foley, research director at Forex.com.
"Given that the already announced doses of austerity will ensure Greece remains in recession this year, there is no guarantee that Greece will be able to tolerate continued belt tightening over the next couple of years," said Foley.
For now though, hopes of an imminent agreement has helped ease the pressure on the euro, which earlier this week slid to a one-year low against the dollar — by late morning London time, the euro rose 0.5 percent to $1.3306.
Away from Greece, investors will have one major news release to digest this afternoon before wrapping up for the weekend — the first estimate of U.S. economic growth for the first quarter of 2010.
The consensus in the markets is that the U.S. economy grew at a 3.4 percent annual rate — that would mark the third straight quarterly gain as the United States heals from the longest recession since the 1930s.
Ahead of the data, Wall Street was poised for a solid opening after gains on Thursday, when stocks rallied after a series of upbeat earnings reports and a reading on unemployment that suggested layoffs might be slowing.
Analysts pointed out that a sharp deviation from the consensus could alter expectations for Wall Street's open.
Dow futures were up 9 points, or 0.1 percent, at 11,144 while the broader Standard & Poor's 500 futures rose 1.3 point, or 0.1 percent, at 1,206.60.
Earlier in Asia, Japan's Nikkei 225 stock average rose 132.61 points, or 1.2 percent, at 11,057.40, while Hong Kong's Oil prices rose, with benchmark crude for June delivery up 60 cents to $85.77 a barrel. The contract rose $1.95 to settle at $85.17 on Thursday.
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