From Morrison Securities Pty Ltd.

U.S. Stock Markets

U.S. stocks wrapped up a second straight week of gains as the euro zone's latest plan to fix its debt crisis overshadowed some disappointing forecasts from big U.S. companies. The Dow Jones Industrial Average advanced 187 points, or 1.6%, to 12184.26, undoing most of the previous day's sharp losses.

The Standard & Poor's 500-stock index climbed 20.84 points, or 1.7%, to 1255.19, and the Nasdaq Composite advanced 50.47 points, or 1.9%, to 2646.85. The advance was led by financial stocks. J.P. Morgan Chase gained 3%, Bank of America added 2.3% and Morgan Stanley climbed 3.2%.

Holding back some of the Dow's gains was DuPont, which fell 3.2% after the chemical company revised its full year 2011 earnings outlook to a range below analyst expectations. With Friday's gains, the blue-chip Dow logged a weekly gain of 1.2%, adding to the previous week's 7% rally.

The Dow is now 1.2% higher for December, and up 5.2% for the year. Friday's move came after the 17 countries of the euro zone, overriding opposition from the U.K., formally agreed to run only minimal budget deficits in the future and allowed the European Court of Justice the right to strike down national laws that don't enforce such discipline, a major transfer of national sovereignty over budget policy.

While details of the agreement were scarce, leaders agreed to cap the European Stability Mechanism at EUR500 billion ($667.05 billion), and that EU nations would provide up to EUR200 billion in loans to the International Monetary Fund to increase its funding ability.

European Stock Markets

European stock markets rose Friday after euro-zone leaders agreed to forge closer fiscal ties as part of efforts to address the sovereign debt crisis.

The Stoxx Europe 600 index rose 1.2% to end at 240.51. For the week, it finished down 0.1%. At a summit in Brussels, euro-zone leaders committed to an inter-governmental accord on tougher fiscal rules that will likely be adopted by 26 European Union nations, with the U.K. the only member definitively refusing to join the agreement.

Upward momentum for European stocks was cemented as a U.S. consumer sentiment survey showed the highest reading since June. Stocks in Italy, a country that has particularly come under pressure amid the crisis, shot higher, with the FTSE MIB index soaring 3.4% to 15,483.91, buoyed by a nearly 7.1% rise for UniCredit SpA and a nearly 8% gain for Intesa Sanpaolo SpA. The French CAC 40 index rose 2.5% to 3,172.35, with major banks shaking off downgrades by Moody's Investors Service.

In Paris, Credit Agricole SA gained 4.1%, BNP Paribas SA jumped 4.5% and Societe Generale SA gained 2.4%, following positive momentum for the sector across Europe.

Moody's cut the long-term debt ratings of those banks by one notch each, citing a deterioration in funding and liquidity conditions and macroeconomic fundamentals. Goldman Sachs Friday lifted its recommendation on European banks to neutral from underweight, saying new funding arrangements agreed by the European Central Bank and other central banks should significantly help the banks offset the pressures of the economic downturn.

Also in Paris, shares of Schneider Electric SA jumped 5.2%, after J.P. Morgan Cazenove said the company, rated overweight, was a top pick in the European capital-goods sector. Shares of U.K. banks also made sharp gains, with Lloyds Banking Group PLC surging 6.5%, and Barclays PLC and Royal Bank of Scotland Group PLC up 5.4% and 5.1%, respectively. The FTSE 100 index rose 0.8% to 5,529.21.

The U.K. refused to agree to closer fiscal ties with other EU members. U.K. Prime Minister David Cameron said the measures weren't in the U.K.'s best interest. The German DAX 30 index rose 1.9% to 5,986.71, with Deutsche Bank AG up 4.7%, Commerzbank AG up 3.7% and insurer Allianz SE up 3.2%.

Asian Stock Markets

Asian stock markets ended lower Friday as investors were disappointed the fiscal union pact for the 17 euro-zone members emerging from the European Union leaders summit didn't manage to achieve unanimous backing for treaty changes.

Japan's Nikkei Stock Average ended down 1.5%, South Korea's Kospi lost 2.0%, Hong Kong's Hang Seng Index lost 2.7%, and China's Shanghai Composite fell 0.6%. Lower than expected inflation data from China failed to provide much of a sentiment boost around the region, despite hopes for further policy loosening, as it also spurred concerns over growth in the world's second-largest economy.

Around the region, growth-sensitive exporters and resources stocks were lower, with energy plays sold off after crude oil futures posted their largest decline in three weeks Thursday. In Tokyo, Sony dropped 3.3%, while LG Electronics fell 4.1% in Seoul and Acer lost 1.6% in Taipei. S-Oil fell 3.5% in Seoul and Cnooc lost 3.5% in Hong Kong.

Semiconductor-related stocks also lost ground in Tokyo after Texas Instruments lowered its fourth-quarter guidance as concerns about the broader economy led to weaker demand. Tokyo Electron fell 1.9% and Advantest lost 3.0%. Among other chip plays, Hynix Semiconductor lost 3.0% in Seoul and TSMC fell 2.9% in Taipei. Financial stocks around the region were also hard-hit. China Minsheng Banking fell 2.2% in Hong Kong and 1.3% in Shanghai. Daiwa Securities lost 3.4% in Tokyo, Hana Financial shed 2.0% in Seoul, and DBS Group fell 1.5% in Singapore.

Commodities
Base metals closed higher on the London Metal Exchange Friday, supported by a more buoyant euro and stronger equity markets following the close of the keenly watched European Union summit in Brussels.

At the close, LME three-month copper was 1.5% higher on the day at $7,815 a metric ton. Nickel was up 1.7% at $18,600/ton. Oil futures closed up more than a dollar Friday on a late-session rally after bouncing around the break-even point most of the day.

Light, sweet crude for January delivery ended the day up $1.07, or 1.1%, at $99.41 a barrel on the New York Mercantile Exchange, bouncing back from Thursday's rout when oil prices lost more than 2%. Brent crude on the ICE futures exchange ended up 51 cents, or 0.5%, at $108.62 a barrel.

Oil futures vacillated between positive and negative territory in a narrow range, until a surge upward in the last half hour of trading. The late rally saw trading volume reaching as high as eight times normal levels at some points. In the absence of any specific news affecting the market, traders said the run-up likely was driven by preprogrammed buy orders designed to kick in when prices hit specific low points.

Gold futures rose on cautious optimism that the European Union's plan to strengthen member states' fiscal discipline would help stave off a financial crisis there. The most actively traded gold contract, for February delivery, rose $3.40, or 0.2%, to settle at $1,716.80 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract was 2% lower for the week.