Prices of safe-haven US and German government bonds fell as European leaders expressed optimism that the Greek deal could be struck on Monday.

Equities in Europe hit a six-month high as shares of euro-zone banks shot up.

But on Wall Street key indexes were little changed, as investors mulled the strength of a recent rally that has driven the S&P 500 to a nine-month high. Many were also cautious ahead of a long weekend, with US markets closed on Monday for the Presidents Day holiday.

"The trend here is to move higher, in the absence of a crisis coming out of Europe. But going into next week, which is when the conclusion (from Greece) is expected, fund managers and traders will be a little bit nervous because our market will be closed on Monday," said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

"I wouldn't be surprised if the gains today are muted, or even if we end slightly lower as hedging may feed to the downside."

The Dow Jones Industrial Average rose 15.63 points, or 0.12 percent, at 12,919.71, while the Standard & Poor's 500 Index dipped 0.27 points, or 0.02 percent, to 1,357.77. The Nasdaq Composite Index lost 15.38 points, or 0.52 percent, to 2,944.47.

World stocks as measured by the benchmark MSCI All-Country World index rose 0.5 percent, however, to reach their highest since August. In Europe, the FTSEurofirst 300 index of top shares closed 0.59 percent higher at 1,083.22 points.

Shares of euro zone lenders that are among the most exposed to Greek debt rallied, with Societe Generale up 6.5 percent and Credit Agricole up 4.7 percent.

Emerging stocks measured by a benchmark MSCI index added 1.1 percent, and are up more than 15 percent since the start of 2012.

"Generally investors are only trading for the short-term," said Mark Foulds, head of equity sales at ETX Capital. "They are being attracted by the more volatile sectors, such as the banks, which will do well if there is a second Greece bailout."

US crude oil prices gained 0.6 percent to $102.96 per barrel, although Brent crude oil fell more than a dollar a barrel, to $118.85, as investors pocketed profits after four straight sessions of gains.

The euro rose 0.1 percent to $1.314, after hitting a three-week low of $1.2973 on Thursday.

"I think we'll get this Greek deal and the euro will edge higher. But Greece is clearly not out of the woods and its problems will be revisited many times in coming months," said Paul Robson, currency strategist at RBS.

As appetite for risk increased, benchmark 10-year US Treasury notes fell 8/32 in price, driving their yield up to 2.01 percent.

German Bund futures fell as much as 69 ticks on the day to 138.34 after a report that the European Central Bank was considering allowing Greek bonds held by national euro zone central banks to be subjected to the same losses private investors are set to take.

Data showing US consumer prices rose the most in four months in January boosted demand for inflation-protected securities, although it had little impact on stocks.

"What this does is alleviate any argument inviting" more quantitative easing, said Todd Schoenberger, managing director at Landcolt Trading in Wilmington, Delaware. "But all eyes are on Greece, so this shouldn't have an impact on trading."

The break-even rate on US 10-year Treasury inflation-protected securities, or TIPS, moved up to 2.27 percent, over 3 basis points higher than late Thursday and the largest since Aug. 11, according to Tradeweb. The rate measures the yield gap between 10-year TIPS and comparable Treasuries.