The Dow and S&P 500 rose on Friday after France and Germany outlined an agreement to aid debt-burdened Greece, but analysts said a recent bearish trend may not be over. The Dow managed to close just above 12,000, but the S&P 500 barely squeaked out a gain for the week after six straight weeks of losses.
The uncertainty surrounding a resolution of the debt crisis kept investors wary of committing more cash to equities. Research In Motion Ltd's U.S.-listed shares sank 21.5 percent to $27.75 in its busiest day of trading in almost six years. The BlackBerry maker's sour results, released late Thursday, pushed the Nasdaq lower and dragged on other top technology names such as Apple Inc, down 1.5 percent at $320.26.
France and Germany said they would ask banks holding Greek debt to voluntarily shoulder some of the burden. Meanwhile, Greece's prime minister appointed a new finance minister to try to push through harsh economic reforms.
The debt crisis escalated this week as Moody's Investors Service said it may cut the credit ratings of French banks, citing exposure to Greek debt. Late Friday, Moody's said it was reviewing Italy's sovereign credit ratings for a possible downgrade.
"The question now in many people's minds is whether or not a credit event in Europe, the ripple effect, will be strong enough to put the U.S. economy in a recession. I honestly don't see that," said Natalie Trunow, chief investment officer of equities of Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.
But, she said, "people are finally starting to connect the dots between the sovereign debt crisis and the potential impact on some of the larger companies involved in those countries and some of the banks."
The S&P financial index was up 0.9 percent for the day, but is down about 7 percent since the start of the year. The KBW Bank Index .BKX rose 1.1 percent on Friday.
The Dow Jones industrial average rose 42.84 points, or 0.36 percent, to end at 12,004.36. The Standard & Poor's 500 Index gained 3.86 points, or 0.30 percent, to 1,271.50. But the Nasdaq Composite Index fell 7.22 points, or 0.28 percent, to 2,616.48.