The German IFO Business Confidence Survey showed that the nation's business leaders are more confident about the future of the Eurozone economy than expected, with the index rising to 107.4, beating expectations of a reading of 105 and better than last month's 104.3.

In other news around the markets:

The European Union has cut its growth forecasts for 2013, slashing estimates to a contraction of 0.3% from a previously projected growth of 0.1%. German growth forecasts were cut to 0.5% from 2% previously, French forecasts were cut to 0.1% from 1.2% , and U.K. growth was cut to 0.9% from 1.9% previously.

The Bank of England and the People's bank of China have confirmed that they are in talks to set up three-year swap lines aimed at financing trade and direct investment and supporting financial stability.

German fourth-quarter GDP was reported as contracting 0.6% in the fourth quarter, in line with expectations, and growing 0.1% on an annualized basis, also in line with expectations.

Some trading highlights:

• S&P 500 futures rose 3.6 points to 1,504.80.
• The EUR/USD was was higher at 1.3208 following the German IFO data.
• Spanish 10-year government bond yields fell to 5.17% after Spain reported that its deficit widened to 10.2% in 2012.
• Italian 10-year government bond yields fell to 4.46% .
• Gold rose 0.03% to $1,579.30 per ounce.
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Asian Markets

Asian shares were mixed overnight as Chinese shares fell on fears that the property market is overheating, which could lead to the PBOC entering an earlier-than-anticip​ated tightening cycle. The Japanese Nikkei Index rose 0.68%, the Shanghai Composite Index fell 0.51% and the Hang Seng Index declined 0.54%. Notably, Chinese shares closed down almost 5% on the week. Also, the Korean Kospi gained 0.18%, and Australian shares rose 0.76% .

European Markets

European shares were higher following the strong IFO survey but have given back some gains following the EU growth forecast cut. The Spanish Ibex Index rose 0.96%, and the Italian FTSE MIB Index rose 0.7%. Meanwhile, the German DAX gained 0.42%, the French CAC rose 1.11% and U.K. shares rallied 0.58%.

Commodities

Commodities were slightly higher in early Friday trade after taking a beating all week across the commodity complex. WTI Crude futures rose 0.16% to $92.99 per barrel, and Brent Crude futures rose 0.68% to $114.29 per barrel. Gold was higher, and silver futures rose 0.26% to $28.78 per ounce.

Currencies

Currency markets were rather quiet overnight as the Australian dollar popped on a technical bounce. The EUR/USD was higher at 1.3208, and the dollar rose against the yen to 93.28 while the pound sterling gained back against the dollar to 1.5258. Overall, the Dollar Index fell 0.16% on weakness against the euro, the pound and the Swiss franc despite strength against the yen and the Canadian dollar. Notably, the Australian dollar rose 0.69% against the greenback on a technical bounce to 1.0316 and rose even more against the yen.

Pre-Market Movers

Stocks moving before Friday's market open included:

• Hewlett Packard (HPQ) shares rose 5.61% after the company reported better-than-expected​ earnings and disclosed no plans to break up the company.
• American International Group (AIG) shares rose 4.64% as the company also reported operating earnings that beat analyst estimates, but it still reported a loss due to claims resulting from Hurricane Sandy.
• Berkshire Hathaway (BRK.A)(BRK.B) shares rose 1.28% pre-market and remain just shy of the stock's all-time high as investors see a wave of new acquisitions boosting Buffett's war chest.
• Caterpillar (CAT) shares rose 0.62% pre-market after declining 1.81% Thursday as the company warned that comparable sales in January slowed from a year ago.

Earnings

Notable companies expected to report earnings Friday include:

• Abercrombie & Fitch (ANF) is expected to report fourth-quarter EPS of $1.95 vs. $1.12 a year ago.

Economics

On the economics calendar Friday, Fed member Jerome Powell is set to speak. Also, the ECRI weekly index is expected, and Canadian CPI is due out. Over the weekend, the Italian elections begin on Sunday. Polls close Monday with the first exit polls coming in the afternoon following the closing of the polls. 

Momentum has been on the side of former Prime Minister Silvio Berlusconi retaking power, however, there is a fear that the election could produce no majority and a stalemate similar to the one seen in Greece over the summer, only eight times larger.

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