European shares rallied to post a sixth consecutive weekly gain, and major US equity indexes also headed for sixth straight week of gains, a streak last seen when stocks started their long climb off decade lows in March 2009.

"The market is reacting to very much what is going on in the Greek situation," said David Hussey, head of pan-European equities at MFC Global Investment Management. "It is soothing the markets." The euro gained 0.85 percent versus the dollar at $1.3471.

Global equities measured by MSCI's All-Country World Index rose almost 1 percent, snapping a two-day losing run.

European banking shares bounced back after two days of declines, while energy shares led US stocks higher on news that Reliance Industries, India's largest listed firm, will form a joint venture with Atlas Energy.

Shares of Atlas, an independent gas company, jumped more than 18 percent.

Shortly before 1 p.m., the Dow Jones Industrial Average was up 47.08 points, or 0.43 percent, at 10,974.15. The Standard & Poor's 500 Index was up 5.06 points, or 0.43 percent, at 1,191.50. The Nasdaq Composite Index was up 9.59 points, or 0.39 percent, at 2,446.40.

The pan-European FTSEurofirst 300 index of top shares closed up 1.3 percent at 1,101.78 points and reached an 18-month high. The index is up nearly 71 percent from its lifetime low reached in early March 2009.

HSBC, Banco Santander, UBS and Credit Suisse gained 2.1 to 4.1 percent.

Speculation grew throughout the day about a Greek bailout after the president of the European Union, Herman Van Rompuy, was quoted as saying that the EU stood ready to help Greece if asked.

Billionaire financier George Soros told Reuters that the Greek debt crisis was solvable if Germany agreed that any emerging lending would be made with concessionary interest rates, as suggested by the standard IMF bailouts.

The dollar was down against a basket of major currencies, with the US Dollar Index down 0.64 percent at 81.013.

Against the yen, the dollar was down 0.18 percent at 93.21.

Gold rose to the highest level this year as concern over the fiscal outlook for peripheral euro zone economies boosted safe haven flows into the precious metal.

Spot gold prices rose $11.80 to $1,161.90 an ounce.

US Treasuries prices fell as rising equity markets and signs of stabilization in Greece tarnished the luster of safe-haven US government debt.

The benchmark 10-year US Treasury note was down 3/32 in price to yield 3.90 percent.

Oil fell to around $85 a barrel on Friday, retreating further from an 18-month high reached on Tuesday, which some attributed to a technical reversal. Investors also focused on healthy oil supplies.

"Crude futures are falling on technical trading. Chart moves show the front-month contract is trying to hold at the breakout pattern around $84.87 a barrel," said Mark Waggoner, president of Excel Futures in Oregon.

US light sweet crude oil fell 55 cents, or 0.64 percent, to $84.84 per barrel.