Hope lifts global stocks before Greek election

US stocks rallied on Friday to close a second straight week of gains on hopes of collective action from global central banks if Sunday's election in Greece triggers market turmoil.

The Dow Jones industrial average gained 115.26 points, or 0.91 percent, to 12,767.17 at the close. The Standard & Poor's 500 Index added 13.74 points, or 1.03 percent, to 1,342.84. The Nasdaq Composite rose 36.47 points, or 1.29 percent, to end at 2,872.80.

European stocks ended higher, with a key euro zone index hitting its highest closing level in nearly four weeks, as speculation of coordinated action by the world's top central banks eclipsed jitters over Greece's cliffhanger vote on Sunday.

The FTSEurofirst 300 index of top European shares closed 1 percent higher at 993.23 points, while the euro zone's blue-chip Euro STOXX 50 index ended 1.5 percent higher at 2,181.23 points.

Japan's Nikkei share average ended flat on Friday as a risk-off atmosphere pervaded ahead of a pivotal election in Greece at the weekend, but losses were tempered by an overnight report that central banks were prepared to offset potential market turmoil.

The Nikkei closed flat at 8,569.32 after dipping in and out of negative territory throughout the day, rounding off a rangebound week marked by thin volumes and low liquidity as investors played it safe ahead of the Greek election on Sunday, which could set the country on a path to exit the euro zone.

Average daily volumes on the broader Topix index, which inched up 0.1 percent to 726.57, have dropped 25 percent this week from last week.