Stocks climb on hopes for action in Europe

By Andrea Tse

Stocks rose Friday as investors shrugged off weak readings on New York manufacturing activity and U.S. consumer sentiment, cheering reports that the world's biggest central banks are ready to calm markets should the outcome of Greece's general elections cause panic.

The Dow Jones Industrial Average ($INDU) was up by 46 points at 12,698. The S&P 500 ($INX) was up by 5 points at 1,335. The Nasdaq Composite ($COMPX) was up by 17 points to 2,853.

U.S. stocks jumped Thursday on rising hopes that additional stimulus is on the way from the Federal Reserve after a disappointing initial jobless claims number, as well as a report by Reuters that G-20 central banks are planning for coordinated action to bring liquidity if needed after the Greek election Sunday.

"The ECB has the crucial role of providing liquidity to sound bank counterparties in return for adequate collateral," European Central Bank President Mario Draghi said as he joined other central bankers of major economies who asserted they will act if chaos ensues after Greece's election.

"This is what we have done throughout the crisis, . . . and this is what we will continue to do," he said.

The FTSE in London was rising 0.23%, and the DAX in Germany was up 1.35%. Hong Kong's Hang Seng closed up 2.3%, while Japan's Nikkei finished flat.

The Federal Reserve Bank of New York reported Friday that its Empire State Manufacturing Index showed a much steeper-than-expecte​d decline to 2.29 in June, the lowest level going back to last November, from 17.1 in May. Economists surveyed by Briefing.com had expected a drop to 10. 

U.S. factories produced less in May than in April as automakers reduced their output for the first time in six months, The Associated Press reported. The Federal Reserve said factory output declined 0.4% last month after increasing 0.7% in April. Auto production fell 1.5%. Auto sales rose sharply earlier this year but slowed in May.

In corporate news, Yammer agreed to sell itself to Microsoft (MSFT) for $1.2 billion, the Wall Street Journal reported, citing a person familiar with the matter. (Microsoft owns and publishes MSN Money.)

It's unclear when the acquisition of Yammer will be completed and announced, said a person familiar with the deal, the Journal reported.

Yammer is often called Facebook for the workplace because it creates private social networks inside companies, the newspaper noted.

Dell (DELL) is the "strategic bidder" that offered to buy Quest Software (QSFT) for $2.15 billion in cash, sources familiar with the matter told Reuters.

The reported Dell bid tops an earlier offer of nearly $2 billion from private investment firm Insight Venture Partners.

United Technologies (UTX) received conditional approval from China for its $16.5 billion takeover of Goodrich (GR), the maker of aircraft parts.

Goodrich will have to divest its electrical power generation and transmission systems businesses and should sell 60% of joint venture Aerolec within six months, China's Commerce Ministry said.

Best Buy (BBY) shares rose Thursday after an upgrade by Citigroup.

Citigroup changed its rating on the consumer electronics retailer to neutral from sell. Best Buy shares are down 35% this year.

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