European stocks and U.S. stock futures headed north as G20 finance ministers started discussing a debt crisis-resolution plan and after Google Inc. announced strong earnings.
Britain's FTSE 100 gained 1 per cent, France's CAC 40 rose 0.9 per cent, and Germany's DAX climbed 0.7 per cent. Investors had initially pulled back after Standard & Poor's cut Spain's credit rating to AA- from AA, its third downgrade in as many years.
Dow futures gained 93 points, or 0.8 per cent, rising to 11,485, while S&P 500 futures rose 10.5 points, or 0.9 per cent, to 1,208.40.
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Internet search giant Google said its profit rose 26 per cent and revenue increased 37 per cent in the third quarter. Excluding certain items, Google earned $9.72 (U.S.) a share, while analysts polled by Thomson Reuters I/B/E/S were expecting adjusted EPS of $8.74.
Its shares leapt 7 per cent to $597.92 in premarket trading on the Nasdaq.
In Paris, finance ministers and central bank heads from the G20 nations were trying to flesh out a plan to deal with Greece's sovereign debt crisis, recapitalize banks and possibly give the International Monetary Fund and Europe's bailout fund more firepower, .
A Franco-German crisis plan is likely to ask banks to accept bigger losses on their Greek debt than the 21 per cent spelled out in a July plan for a second bailout of Athens, which now looks insufficient. German banks are preparing for losses of as much as 60 per cent, according to market chatter.
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Greek Finance Minister Evangelos Venizelos pledged on Friday to pass austerity measures in parliament next week, despite mounting opposition from labour unions and within the ruling party's own ranks.
The euro dipped after the S&P downgrade of Spain but pared losses to stand little changed at around $1.3802.
The Canadian dollar traded higher at 98.25 (U.S.).
Copper rose 2.3 per cent after China's inflation rate dipped to 6.1 per cent in September, raising hopes of a soft landing for the world's second-largest economy.
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West Texas Intermediate crude oil rose $1.26 to $85.49 a barrel.
Gold was also in demand, up 0.5 per cent at $1,676.20 an ounce, heading for its biggest weekly gain in more than a month.