Global stocks rise on Greek bailout optimism

US stocks edged higher on Friday, but investors stayed cautious before a long holiday weekend when hopes are set for Greece's bailout plan to be approved.

The Dow Jones industrial average gained 45.56 points, or 0.35 percent, to 12,949.64. The Standard & Poor's 500 Index added 3.17 points, or 0.23 percent, to 1,361.21. The Nasdaq Composite Index dropped 8.07 points, or 0.27 percent, to 2,951.78.

European stocks rallied, with a key index hitting a level not seen since before the market's early August nosedive, fuelled by renewed expectations of a bailout deal for Greece that would further ease tensions over the euro zone debt crisis.

The FTSEurofirst 300 index of top European shares closed 0.6 percent higher at 1,083.22 points, led by shares of euro zone lenders among the most exposed to the Greek crisis such as Societe Generale and Credit Agricole , up 6.5 and 4.7 percent respectively.

The index has gained 1.8 percent on the week, posting a fifth weekly gain for the year.