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The markets headed into the green in afternoon trading on Friday on hopes European leaders will take action to help Spain's struggling banking sector.

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Today's Markets

As of 3:40 p.m. ET, the Dow Jones Industrial Average rose 68.1 points, or 0.55%, to 12529, the S&P 500 rose 8.4 points, or 0.64%, to 1323 and the Nasdaq Composite gained 25.5 points, or 0.9%, to 2857.

With little in the way of economic data released this week, market participants have been focused on a stream of commentary from global central banks. However, much of the news has come as a disappointment. The European Central Bank and Bank of England both held off on making changes to their monetary policy, while commentary from Federal Reserve Chairman Ben Bernanke was interpreted as suggesting the central bank isn't quite ready to unleash another round of easing. Meanwhile, China slashed its benchmark lending and deposit rates, stoking fears among some analysts that it will presage the release of weak data from the world's No. 2 economy.

This comes at a time when the economic backdrop is growing to be increasingly dim. The growth rate in U.S. and China appears to be slowing down, while Europe's woes continue deepening. Indeed, Spain, the fourth-largest eurozone economy, is planning on asking the European Union for help rescuing its banking sector this weekend, according to a report by Reuters, citing unnamed sources. A separate report from Dow Jones Newswires says high-level EU officials will be talking on a conference call this weekend.

The U.S. trade deficit narrowed in April to $50.06 billion from $52.62 billion in March. Economists had been expecting the deficit to fall to $49.5 billion. Looking into the report, exports dipped 0.8%, while imports dropped 1.7%. While the report is a lagging indicator, the difference between the imports and exports figures directly into broader gauges of second-quarter economic growth. The bigger the deficit, the more it detracts from gross domestic product.

Commodities were mixed. The benchmark crude oil contract traded in New York slipped 72 cents, or 0.85%, to $84.10 a barrel. Wholesale New York Harbor gasoline rose 0.01% to $2.69 a gallon.

In metals, gold climbed $3.40, or 0.21%, to $1,591 a troy ounce.

Foreign Markets

The Euro Stoxx 50 rose 0.04% to 2144, the English FTSE 100 slid 0.23% to 5435 and the German DAX slumped 0.22% to 6131.

In Asia, the Japanese Nikkei 225 tumbled 2.1% to 8459 and the Chinese Hang Seng skidded lower by 0.94% to 18502.