Despite the deal contained the Eurozone debt crisis, Italy's cost of borrowing has a record high. On Friday, at an auction Italy paid 6.06% to borrow for 10 years since the euro was created in 1999. The rate edged over 5.86% which was the previous record high-at its last auction a  month back. the auction emerged as stock markets were not successful to foolow up on their global rally on Thursday, with shares in many European banks narrowing.

An interest rate of 6% and more adds to unsustainablity. The Italian Treasury too failed to live up to its borrowing target, having hoped to sell as much as 8.5bn euros ($12.1bn, £7.5bn) of bonds. They could manage to sell only 7.9bn euros of the 10-year benchmark debt.

Amidst flat growth, Italy has the highest total debt in the eurozone. However it has benefits, as most of its debts are owed to its own people rather than outside investors. after the auction results were announced losses on the Italian stock market sparked. On Thursday, eurozone leaders agreed to expand the single currency's bailout fund to 1tn euros, and to take measures to recapitalise banks. To protect themselves against losses resulting from any future blunders banks must raise more capital, as per the terms of the Brussels deal thrashed out by EU. At the same hour some banks accepted a loss of 50% on their Greek debt.

"The best we can say is that the EU have engineered a temporary reprieve but there is no guarantee of a final resolution to the crisis," said Neil MacKinnon of VTB Capital.

Samsung Electronics co beats Apple Inc to become world's top smartphone maker in July-September period.  Research shows that Samsung sold 27.8 million smartphones in the three month period, compared with 17.1 million from Apple and 16.8 million from Nokia. It was also reported that Apple's growth was crippled by customers waiting for the launch of iPhone 4s.

Samsung only entered the smartphone market in earnest last year, but its sales have catapulted.  All to a sleek production system that rapidly brings new products to market. Apple introduced its first iPhone in 2007. Nokia was the top handset seller with a 27.3% market share, followed by Samsung with 22.6% and LG with 5.4%. Shipments of smartphones jumped 44 percent from the preceding quarter to 27.8 million units, up nearly four times from a year ago, according to research firm Strategy Analytics.

The report came immediately after the release of Samsung's third-quarter results, which depicted  profits going down 23% as strong growth in its mobile phone business was overshadowed by a poor performance in the memory chip arm.

Handset profits more than doubled to 2.52tn won ($2.3bn; £1.4bn) on strong sales from its Galaxy smartphones.

"Samsung's rise has been driven by a blend of elegant hardware designs, popular Android services, memorable sub-brands and extensive global distribution," said Alex Spektor from Strategy Analytics. Shipments of smartphones jumped 44 percent from the preceding quarter to 27.8 million units, up nearly four times from a year ago, according to research firm Strategy Analytics.

"Samsung has demonstrated that it is possible, at least in the short duration, to differentiate and grow by using the Android ecosystem."

Nokia's market share for smartphones  narrowed from 33% in third quarter to 14% this time round.  Yet the recent launch of the new Microsoft Lumia portfolio has helped to raise Nokia's profile.

The technology giant is in talks with several private equity firms for a piece of the troubled rival Yahoo. Google is exploring the possibility of lending financial support to private equity firms interested in buying Yahoo Inc's core business, according to a report by The Wall Street Journal.

Citing an unidentified source close to the situation, the paper reported that Google and prospective partners have held early-stage discussions, but haven't put together a formal proposal.

The source added that Google might end up not pursuing a bid. It is unclear which private-equity firms the internet search company has talked to. Google representatives were unavailable to comment on the matter.

Any involvement by Google in a Yahoo acquisition is likely to draw antitrust scrutiny from regulators, because of both companies' shares in the Internet search business.

Google is primarily interested in what they could reap from teaming up with Yahoo, which is selling some advertising across Yahoo's website.

Microsoft is another player that has shown interest in providing financial assistance to a private equity firm in a bid for a part of Yahoo.

Yahoo has been in trouble since the sacking of its former CEO Carol Bartz earlier in September this year. The company is weighing strategic options with the help of the investment banking firm Allen & Co and has reportedly hired the executive search firm Heidrick & Struggles in search for a new CEO.

Silver Lake Partners, Providence Equity Partners, Bain Capital, Hellman & Friedman, Blackstone Group, and KKR are among the several private equity firms that are said to be considering buyout offers for Yahoo.

US consumers rose their spending on retail goods at more than expected rate in September, with a hopeful sign of slothful economy. The sales went up by 1.1% over the last month. The consumer spending was more on autos, clothing and furniture. It was the largest gain in seven months as per the US Department of Commerce. Auto sales rose 3.6 percent to account the overall September increase. Still, excluding that category, sales increased a firm 0.6 percent. On contrary no all sectors gave positive figures. Grocery stores recorded a 0.3% monthly drop in sales. Sporting goods, hobby, book and music stores reported a similar fall.

"Retail sales may have received some boost following Hurricane Irene but this appears to be a solid report," said Ryan Sweet at Moody's Analytics

"All told, real spending will rise in September, which sets us up well for growth this quarter."

Though economy being at the risk of recession, stronger spending could help consumer to tamp down concerns. Consumer spending is closely watched because it accounts for 70 percent of economic activity. With 20^th consecutive month when stockpiles have risen, reports also show that US business inventories increased by 0.5%. This augment is boosting up the confidence as it suggests companies expected demand will continue to improve. US inventories totaled $1.54 tn the month, which counts nearly 17% higher than their September 2009 percentage.

Paul Dales cautioned that weak hiring will likely prevent consumers from spending at this rate on a month-to-month basis.

Amidst the differences between the Republicans and Democrats, the US senate has adjourned its vote on the much-debated currency bill until next week. The bill would help imposing penalties on goods from Countries which keep their currencies intimately low. To gear up exports politicians and some business groups have accused China of using its policy of limiting the Yuan’s value.

"I think China needs to carefully think about and process the substance of what people are saying here on the floor of the United States Senate," said John Kerry, chairman of the Democratic Senate Foreign Relations Committee.

Despite the slowdown in the US economy, currency policy of China grabs all attention. President Barack Obama said "China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States".

"It is indisputable that they [China] intervene heavily in the currency markets and that the RMB [yuan], their currency, is lower than it probably would be if they weren't making all those purchases in the currency markets."

The undervaluation of Yuan has not only proved unfairly advantageous to Chinese exporters, but it has also added to the payoff situation in the US., said the politicians and policy makers.

Mr Schumer added that if no action was taken against China's policies the US "may never recover as a country. This is serious stuff".

Mr Obama, however warned to maintain vigilance to solve the matter. He said, "My main concern and I've expressed this to Senator Schumer, is whatever tools we put in place, let's make sure that these are tools that can actually work, that they're consistent with our international treaties and obligations."

Additionally some politicians report that the bill may harm rather than benfit the US economy.

Bruce Josten of the US Chamber of Commerce wrote to the Senators earlier this week.

"Unilateral action by the United States will only serve to increase trade tensions and negatively impact the US economic recovery during this fragile period in the global economy,"

Stocks markets had their biggest gain over the month as renewed optimism among investors created a rally in the markets. The Dow Jones industrial average shot up 272.38 points, or 2.5 percent, to close at 11,043.86. The Standard & Poor's 500 rose 26.52, or 2.3 percent, to 1,162.95. Leaders met in Washington and assured investors of taking pre-emptive measures to contain the Euro crisis. The major concern is the Banking sector who could lose the most due to the debt crisis.

Commodity stocks have taken a hit due to the rise in the markets. Gold slumped $45, or 2 percent, to close at $1,594.80. Silver dropped 0.4 percent to end at $29.976 an ounce.

In company news, Berkshire the company led by Warren Buffet have informed investors of a possible buy back. Berkshire said Monday that the company Buffett leads will repurchase its Class A and B shares anytime they are trading at less than 110 percent of book value.  The stock surged 8.1 percent.

The dollar turned lower against the Euro as investors took hope from the discussion of leaders on measures taken to prevent the default crisis. The British pound rose to $1.5530 from $1.5431 late Friday. The dollar fell to 76.49 Japanese yen from 76.72 Japanese yen and to 0.9056 Swiss franc from 0.9070 Swiss franc.

The Stock markets began on a somber note as the markets brought an end to the five-day winning streak in financial markets.  The Dow fell 108.08, or 0.9 percent, to 11,401.01. The S&P 500 fell 11.92, or 1 percent, to 1,204.09. The NASDAQ fell 9.48, or 0.4 percent, to 2,612.

Fresh fears that Greece may not qualify for emergency funds it needs to avoid default. In the US, President Barack Obama on Monday called for $1.5 trillion in new taxes to help reduce the U.S. deficit. The speech marked the start of a new round of deficit-reduction negotiations that are likely to be contentious. European ministers met in Poland to discuss on possible steps that needs to be taken to prevent further defaults and concerns in the Euro region. Investors are also keeping an eye on the Federal Reserve meeting that could shed some light on the progress of the economy.

The dollar strengthened against the Euro on Monday, as the prevailing euro concerns prevailed over the markets. Investors are worried that European officials won't give the country its next $11 billion payment in time to avoid defaulting on its debt. The payment is part of last year's $151 billion bailout package which will provide to the Greece government.

Treasury prices rose amid concerns in the economy. Investors are looking for safe investment avenues unless they find further clarity in the markets.

In Asia, Chinese stocks climbed from a 14 month low as there was short selling on the counter. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, advanced 10.01, or 0.4 percent, to 2,447.80. In the commodity markets Oil rose to $ 86.05 barrel.

The markets have witnessed heavy volatility over the previous weeks. Much has been caused due to the US downgrade by S&P and the increased turmoil in Euro Zone. Concerns have already been shown in the Greece economy as a research report has shown that Greece is likely to miss its 2011 budget targets. This because of delay from the Greek government to implement the austerity measures on time.

The Dow closed at 11493.57 down 1% over the previous day. Sectors such as Banking and Finance faced pressure at the counters. Data released shows that the US economy is in a slowdown phase. However, the slowdown may not translate to a recession in the near term. In worrying signs for the EU, there has been a slowdown in manufacturing in key economies like Germany and France.

The institute for supply management the key index for production in the country has shown a decline in production in the country. This along with rise in unemployment is worrisome for a stuttering US economy. In the United Kingdom there has been a decline in the prices of Real Estate properties. Sluggish demand combined with added inventory in the market has resulted in the decline of property prices.

Meanwhile mining giant Glencore Pharma has made a bid of 750 euros for South African coal firm Optimum coal. The move comes less than a week after Glencore chief executive Ivan Glasenberg said the company was looking "aggressively at opportunities.

There is nothing positive happening in the economy for the markets to factor in at the moment. The markets may continue to hover around until further clarity arises on the euro crisis.

The blue chips jumped more than 130 points, shedding triple-digit losses, as traders shrugged off economic concerns and initial disappointment over Fed chief Ben Bernanke's high-profile speech. Recent economic data have shown the global economic recovery has deteriorated substantially, and economists across the board have warned that the chance of dipping back into recession has increased markedly.

The Dow Jones Industrial Average climbed 135 points, or 1.2%, to 11,285, the S&P 500 rose 17.5 points, or 1.5%, to 1,177 and the Nasdaq Composite jumped 60.2 points, or 2.5%, to 2,480. The FOX 50 gained 10 points, or 1.2%, to 853.  It has been yet another wild week for Wall Street overall

Bernanke echoed those comments, saying the recovery is less robust than expected and will take a while. Indeed, the Fed chief said recent data have pointed to persistent economic drags, and not just temporary factors such as the earthquake and tsunami that slammed Japan in March.

Some market participants expected the central bank to roll out another round of quantitative easing to help strengthen the economy.  The Fed has revealed it plans on meeting for two days instead of one in September to discuss additional monetary policy tools and stands ready to offer additional stimulus as necessary.

A revised reading on second-quarter economic output showed Gross Domestic Product expanding at an annualized pace of 1%, slower than the 1.1% economists predicted, and below the first reading of 1.3%. Interestingly, while the headline GDP number was revised negatively, some economists see the internal figures as actually pointing to a stronger third-quarter recovery.

Consumer sentiment ticked slightly higher in late-August, with the Reuters/University of Michigan gauge climbing to 55.7 from a prior reading of 54.9, slightly below estimates of 56.  Consumers' view of the economy took a big hit between July and August as the debt debate that raged on in Washington, D.C. for weeks and recent market turmoil.

Gold, which has had a highly-volatile week, jumped $34.30, or 2%, to $1,794 a troy ounce.

Stocks tanked amid a global selloff Thursday, spurred by escalating growth fears and disappointing U.S. economic data. The Dow Jones Industrial Average came off slightly from its lows but still closed down 420 points, or 3.7%, at 10,991. The S&P 500 lost 53 points, or 4.4%, at 1141, and the Nasdaq finished off by 131 points, or 5.2% at 2380.

Euro zone fears reared their ugly head Thursday and sent global markets into a tailspin before U.S. markets even opened. European banks came under pressure following a Wall Street Journal report that U.S. regulators are investigating the U.S. arms of big euro zone banks to assess risks amid intensifying financial pressures.

"Fears that the sovereign debt crisis in Europe will continue to escalate with fiscal sustainability now being questioned in Spain, Italy and even France have contributed significantly to the surge in volatility worldwide. An intermediate solution while Europe prepares the steps necessary to flank monetary union with better integrated fiscal and economic policies would help move Spain and Italy away from the bad equilibrium where, on their own, they might be unable to stabilize the reinforcing negative dynamics of spreads and default possibilities.

Elsewhere, Global economic data provided little comfort to investors to feel optimistic about global growth. In Japan, slowing exports in July called into question how quickly the country could rebound from its March earthquake disaster. In Britain, weaker than expected retail sales in July confirmed the threat of subdued consumer activity to the economy.

The FTSE in London sunk 4.5%, and the DAX in Frankfurt plunged 5.8%. Hong Kong's Hang Seng lost 1.3%, and Japan's Nikkei shed 1.3%.

Worries about Europe's economic and debt problems sent stocks Tuesday to their first loss in four days. At the close, the Dow was down 76.97, or 0.7 percent, to 11,405.93. It was the first time in seven trading days that the Dow rose or fell by less than 100 points. The Standard & Poor's 500 index fell 11.73, or 1 percent, to 1,192.76. The Nasdaq composite fell 31.75, or 1.2 percent, to 2,523.45.

The markets are caught in a phase where investors are looking at potential undervalued stocks but are fearful of entering the markets due to Euro debt fears and US economy.

The Dow recovered and had a slight advance at midday, but resumed its drop after the leaders of France and Germany tried to calm worries about Europe's debt problems by pushing for long-term political solutions. Investors were hoping for immediate financial measures like the introduction of a single bond jointly backed by the eurozone's members. The Dow fell as many as 190 points in the early afternoon before again recovering.

In the U.S., the government reported that homebuilders are still stuck in their years-long slump. They broke ground on new homes at an annual rate of 604,000 last month, according to the Commerce Department. That's down from 613,000 in June. In 2005, before the housing bubble burst, housing starts were typically above 2 million.

Investors have largely ignored the strong earnings that companies have reported for the second quarter. Those in the S&P 500 index earned a record amount per share last quarter on an operating basis, which ignores one-time costs and other special items, according to S&P senior index analyst Howard Silverblatt.

Investors have been overwhelmed by the market's volatility, said Tim Holland, portfolio manager of the Aston/Tamro Diversified Equity fund. "When you have these big swings, people completely lose focus on companies and their results. They're paying more attention to the market than the companies that make up the market. The earnings season was good and better than expected."

Gold rose $27 per ounce to settle at $1,785. Last week, it rose above $1,800 for the first time.

US stocks closed higher today as an upbeat retail sales report trumped a weak reading on consumer confidence, capping one of the most volatile weeks in Wall Street history. Investors are now looking at investing options in bonds which are a safe haven during tumultuous markets.

The Dow Jones Industrial Average finished up 125.71 points, or 1.13 per cent, at 11,269.02. The blue-chip index suffered a 1.53 per cent weekly loss despite registering back-to-back gains for the first time since July 7. The Dow also produced triple-digit moves in all five days for the first time since January 2010. The Nasdaq Composite rose 15.30 points, to 0.61 per cent, to 2507.98. For the week, the technology-oriented index dropped 0.96 per cent.

The Dow had surged 423 points in the previous session, marking the first time in the index's 115-year history that it moved by more than 400 points in four straight days of trading.

The data overshadowed an indicator of consumer sentiment that showed a sharp fall in August. The lowest level since 1980 and down sharply from 63.7 in late July. Economists had expected the reading to ease only to 62.

In bond markets, with the Federal Reserve basically guaranteeing easy monetary policy for the next two years, analysts say investors in search of yield have to get used to a "new world" where they're forced to buy longer-term, albeit riskier, US government debt.

The allure of Treasuries took a hit last week when S&P downgraded the US's debt rating. The country's mounting debt load isn't nearly cleaned up, keeping fears alive that there will be another ratings downgrade that would hurt holders of long-term Treasuries the most.

That kind of thinking leaves investors in a conundrum: They either continue buying short-term debt and earn next-to-nothing, or they take the risk of locking themselves into a prolonged period of holding US paper to earn a bit more. Investors are still cautious as they transition into the latter.

The Dow finished down 4.6 percent to 10,719.94. The Standard & Poor’s 500 index lost 51.77, 4.4 percent, to 1,120.76 and the Nasdaq composite index fell 101.47, 4.1 percent, to 2,381.05.

If the stock market moves lately didn’t seem so punishing, they’d be monotonous. Selling intensified in the final hour of business, with some professionals attributing that to traders dumping shares to make margin calls.

The Dow Jones industrial average lost 519.83 points Wednesday. It has declined more than 500 points three times in the last five sessions, and Wednesday’s retreat cost the index more than what it gained in Tuesday’s euphoria based on Federal Reserve policy.

The concern du jour was European debt. New evidence surfaced of financial instability in France and the situation was so serious that President Nicolas Sarkozy, known for his love of the good life, cut short a vacation on the French Riviera to summon his economic ministers.

It was a classic market in flight to safety. Gold rose higher than $1,800 an ounce for the first time, closing at $1,784.30, the dollar rose against most currencies and prices for the 10-year Treasury note rose despite lacking a AAA credit rating. Larson said traders are behaving out of an abundance of uncertainty and that he expects big daily moves to continue for a while. “Volatility breeds volatility,” he said.

Stocks of banks were hit especially hard in an extension of concerns about Europe. Jamie Dimon, chairman of JPMorgan Chase & Co. told CNBC that the economy is strong despite what the market thinks.

In a break from a recent pattern that has seen stocks and oil move in the same direction, the benchmark contract for September crude gained $3.59 to finish at $82.89 per barrel on the New York Mercantile Exchange.

Regional markets took the heaviest hit since March as shockwaves from the 513-point crash of the Dow Jones Industrial Average on Thursday swept through Asia. Markets across the world were in a panic mode as recession fears and the debt crisis in Europe create havoc in the markets across the globe.

On Thursday, fears of a double dip recession and Europe's financial crisis triggered the biggest sell off in US stocks since the 2008 banking crisis.The Dow Jones fell by 513 points or 4.31 per cent to 11,383.68, the biggest single-day loss since Dec 1, 2008 when the Dow plunged 679.95 points.

Asian markets followed suit. The markets were a sea of red, with the Taiwan Taiex Index falling the most, plunging by 5.8 per cent, followed by the Jakarta Composite Index which fell by 4.86 per cent. The FBM KLCI's fall was relatively tame, falling 22.46 points or 1.45 per cent at Friday's close on a volume of 1.78 billion shares.

The impact of the euro zone debt crisis was made worse amid data that showed manufacturing expanded at the weakest pace in two years, spending unexpectedly fell and the services industries grew at the slowest pace since February 2010.

The services sector, which covers about 90% of the American workforce, is growing at the slowest rate in a year-and-a-half. People spent less in June than in May, the first decline since September 2009.

Non-farm payrolls rose by 117,000 in July as private sector employers added 154,000 jobs yesterday, according to the US Labour Department. The unemployment rate dropped to 9.1 per cent from 9.2 per cent in June. It was better than consensus expectations and took some pressures off the Obama administration to boost the economy.

Investors looking to enter the markets need to cautious over their approach at the moment. The markets are volatile and will provide excellent opportunities to invest over the longer run.

Stocks pared most of their losses in another choppy session Friday, following a report that the ECB could purchase Italian and Spanish bonds if Italian Prime Minister Silvio Berlusconi commits to certain reforms. The markets have been in the slide since the Euro Debt crisis snowballed with Italy now in contention to default in its payment.

The Dow Jones Industrial Average erased some of their losses, but was still lower led by BofA and Alcoa, after nose-diving more than 500 points—its worst one-day fall since Dec. 2008. The blue-chip index was up 171 points at its session high this morning. The S&P 500 and Nasdaq also shaved some losses.

The headline from Reuters quoted sources saying the ECB is ready to buy Italian bonds if Italy commits to accelerate economic reforms to bring down the nation's debt.

Traders were also disappointed that the ECB were buying Portuguese and Irish bonds instead of Italian and Spanish debt. Investors are currently focused on Italy and Spain, as they feared these two countries would follow Greece's footsteps in seeking a bailout.

In the previous session, all three major averages tumbled into negative territory for the year. In addition, all three indexes fell into "correction territory," defined by a drop of 10 percent from its peak from its intraday high in Apr. 29.

Stocks were also pressured amid market rumor that S&P is planning on downgrading the U.S.’s credit rating after the markets close Friday.

The key remains Europe and Italy. This weekend could be critical and I think it will be interesting to see how the U.S. traders will play the final hour there’s no reason to be aggressively long

European shares tumbled to see their biggest weekly decline in nearly three years amid worries about weak global growth and further contagion in the euro zone debt crisis, which threatens to engulf Italy and Spain.

The Dow Jones industrial average lost all the gains as the index sharply reversed course, shedding all of those gains after a key manufacturing index tumbled in July. The Dow was down as many as 145 points after the Institute of Supply Management said U.S. manufacturing barely grew last month. Analysts had however expected stronger growth for the month. It was the first major economic report for July and could raise doubts about the predictions of many economists that the U.S. economy will regain momentum in the second half of the year.

Many investors had expected the stock market to rally Monday because President Barack Obama and Congressional leaders announced the day before that they had agreed on a deal to raise the nation's borrowing limit ahead of Tuesday's deadline. Asian stock markets, which closed before the manufacturing report was released, rose broadly overnight following the deal breakthrough.

The Dow Jones industrial average was down 58 points, or 0.5 percent, to 12,085 in afternoon trading. It is the seventh day of declines for the Dow. The broader Standard and Poor's 500 index lost 11, or 0.8 percent, to 1,282. The Nasdaq composite lost 29, or 1 percent, to 2,728.

There are also possibilities of the debt deal being passed by the senate. The debt agreement would raise the U.S. debt limit by $2.1 trillion. It would also cut at least $2.4 trillion in federal spending over 10 years. Under the bill, a new joint committee of Congress would recommend deficit reductions by the end of November that would be put to a vote by Congress by year's end

The manufacturing report led to a worldwide pullback from riskier assets. The Euro Stoxx 50, an index that tracks blue chip companies in countries that use the euro, fell nearly 3 percent. Oil futures dropped 1 percent to just below $95 a barrel. And gold made up its early losses to remain near $1,630 an ounce.

The latest signs of weakness in the U.S. economy pushed the dollar lower against the Japanese yen and the Swiss franc, two currencies that traders see as relatively safe bets. The dollar touched another record low against the franc, and reached a post-World War II low against the yen. One needs to wait and watch if the debt deal could slowdown the US economy furhter.

According to the White House, global financial markets are going to face stressful days in the coming months, especially with American politicians not able to agree a deal to minimize the country’s record debts. Point to be noted here is that US President Barack Obama and senior politicians are currently in talks about tackling a issue which some experts fear could lead it to default on loan repayments.

In terms of statistics, America is all set to reach its self-imposed borrowing limit of $14.3 trillion on August 2.  And that is where, majority of experts are describing the deadlock across the Atlantic as the “next iceberg”.  The main agenda of a deal is to minimize spending and is set to be presented to Congress in coming days and negotiations are likely to dominate the whole proceeding.

There is no doubt about the fact that the negotiations were moving into “difficult days” and it is quite important for the confidence of markets and businesses that deal get an approval immediately.

Timothy Geithner, the US treasury secretary has already announced in media that it was “unthinkable” that US would “not meet its debt obligations”.

Timothy believes that a deal could be reached to delay major decisions for a year, until after the next presidential election. If US do not able to solve its debt crisis, there is a strong possibility that Britain could face the prospect of another international economic meltdown.

There were belief in certain quarters that last week’s eurozone deal could have a positive impact on the market but the situation in US is not going to help the matter. The stock market is going to face the heat if US politicians do not come up with solid decision regarding federal spending.

The weekly gain was extended for the Standard and Poor’s 500, while lower-than-estimated results at Caterpillar dragged the Dow Jones Industrial Average lower. Much of the rally was helped by the rise in prices of tech stocks. AMD rose 19 per cent after the chipmaker forecast more sales than analysts had estimated.

Caterpillar slid 5.8 per cent as profit trailed projections because of the earthquake in Japan and slower demand from China. The SP 500 rose 0.09 per cent to 1,345.02 in New York and gained 2.2 per cent for the week. Shares of Apple gained 7.8 percent this week after the tech giant reported that second-quarter profits more than doubled to $7.31 billion.

Microsoft was up 2.8 percent for the week after it reported record revenue, thanks in part to impressive sales of its Xbox gaming console.

“You’re seeing fast money gravitate to the large-cap tech names, viewing them as better able to withstand slower economic growth,” said Mark Bronzo, who helps manage $26 billion at Security Global Investors in Irvington, New York.

Stocks had surged on Thursday after euro-area leaders eased the terms of loans for cash-strapped nations and announced the latest aid for Greece after eight hours of talks. Quarterly reports from corporations also helped boost US stocks this week.

Next Friday will also be the day when the Federal Reserve publishes its estimate of US second-quarter gross domestic product (GDP) growth. Economists expect a low figure, following the near-stalled 1.9 percent pace of the first quarter.

Still, markets are likely to rally as soon as politicians reach a deal to raise the debt ceiling and reduce the federal deficit, much as they did after the Greece bailout was announced this week.

China's inflationary concern seems to have cooled down with a report from the government agency saying stating that the inflation has stabilized as the impact of the country's monetary-tightening measures and property-market curbs are continually being felt. Policies that stabilize and increase the food supply are taking effect, and slower economic growth will also ease further inflationary pressure.

This could provide a vital boost across the emerging economies as there were fears that there was an asset bubble that was emerging in China and this have potentially derailed the growing markets.

China's consumer price index has probably peaked in June and inflationary pressure will ease in the second half of the year, the paper cited Zhang as saying. China's CPI reached a three-year high of 6.4% year-on-year in June. Uncertainty in the growth of consumer demand will also affect China's economic growth

News across the globe in U.K shows that the wages have not improved satisfactorily to cover inflation. The wages of U.K. manufacturing employees continued to lag inflation in the second quarter, a survey showed Monday, the latest release to suggest a murky outlook for the nation's retail sector.

Manufacturing lobby the EEF said the average pay rise in the three month-period was 2.5%, unchanged from the three months through May and way behind the official rate of inflation, which in June slipped to 4.2% year-on-year. The figures are based on 293 pay settlements covering just over 44,000 workers, said the EEF and JAM recruitment, which compiled the report.

Wage inflation for the whole economy is likely to be lower than that, given that many public-sector workers are enduring a two-year pay freeze. Official data last week showed U.K. wages overall grew 2.1% in the three months through May. With consumers facing de-facto pay cuts as their wages trail inflation, retail spending has been sluggish. One just hopes that the festive cheer would lift the spirits up for the labourers

The Dow Jones Industrial Average gained 56.2 points, or 0.45%, to 12,626, the S&P 500 rose 1.3 points, or 0.1%, to 1,339 and the Nasdaq Composite climbed 8.3 points, or 0.29%, to 2,834. The FOX 50 was up 0.71 point to 938.

Industrial shares paved the way higher on Wednesday, but a retreat by big-name banks capped the gains for the blue chips.

Caterpillar the world's biggest heavy machinery maker and DuPont (DP) were among the best performing blue chips on the day. However, Bank of America and JPMorgan Chase counterbalanced the gains amid concerns over exposure to the euro zone sovereign debt crisis.

The services sector continued expanding in June, according to The Institute for Supply Management's Non-Manufacturing PMI index. The gauge edged lower to 53.3 in June from 54.6 the prior month, slightly shy of estimates of 54 for the month. Readings above 50 indicate expansion, while readings below 50 indicate contraction.

Private sector job cuts rose 11.6% to 41,432 in June, according to Challenger, Gray & Christmas. However, despite the monthly increase, layoffs in the first half of the year were the lowest since 2000.

The highly-anticipated monthly employment report from the Labor Department is slated for release on Friday. Economists expect the economy to have added 94,000 jobs in June and the unemployment rate to have held steady at 9.1%.

Moody's Investor Service issued a report on Tuesday, saying the country faces "formidable challenges" cuttings its spending and increasing taxes, which was a requirement of its recent bailout from the EU and IMF. The ratings company also said there is a heightened risk Portugal won't be able to borrow from capital markets, meaning it could need yet another bailout.

China hiked its interest rates for the third time this year as it struggles with inflation that is the highest in three years. Increased interest rates could slow the developing economies in the near future.