Friday Look Ahead: Greece, Quadruple Witch and Consumer Data

The sluggish state of the U.S. economy will once more be the grist for markets, if Greece's short term financing needs are met.

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Investors were slightly more hopeful that Greece's problems will be solved on a short term basis, following comments from EU officials and the IMF Thursday. European finance ministers meet Sunday and Monday, and could endorse short term funding for Greece if it proceeds with reforms. Still, Greek credit default swaps blew out to a record level above 2000, on worries about a default, and yields on the Greek 2-year note were shockingly high at 30 percent.

Greece's austerity package, if approved, would clear the way for the finance ministers to approve release of funds. EU economics commissioner Olli Rehn said he expected the EU and IMF to release a critical 12 billion euro loan tranche in early July to keep Greece solvent.

"The longer term picture and what the bigger bailout of Greece entails, and whether there's going to be private sector burden sharing is being pushed off until September," said Brian Dolan of

Greek Prime Minister George Papandreou is expected to announce a new cabinet Friday morning after failing to do so on Thursday. Traders are also watching a meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Berlin Friday. Germany has been adamant that private investors share the burden of any Greek bailout, but the concern is that a credit default could be triggered as a result.

The stock market steadied Thursday, with the Dow up 64 at 11,961 and the S&P up 2 at 1267. The Nasdaq fell 7 to 2623. The euro erased some of its losses against the dollar but fell to a record low against the Swiss franc.

Brown Brothers Harriman market strategist Andrew Burkly said the key for stocks will be the economy and the upcoming earnings season. "To us, this whole event we've been going through is more about the soft patch in the economy, and the kind of macro indicators really slowing down," he said.

Burkly said he expects the economy has entered a period of slow growth but data could now become even more uneven as some of the factors that slowed the economy begin to snap back. "A lot of the macro data that leads earnings revisions have rolled over but he earnings revisions haven't come down," he said.

"It could play out two ways in the two or three weeks before earnings season. What's going to happen is that the analysts are going to take their numbers down and lower the bar, but if they don't do that, the bar is relatively high and you that sets you up for a disappointing earnings season," he said.

Besides developments in Greece, markets are watching leading indicators at 10 a.m. and consumer sentiment at 9:55 a.m.

There is also the quadruple of futures and options, which traders believe has been behind the volatility earlier this week. With Thursday's relatively calm session, traders now look to Friday's opening which prices the expiration and affects the cash settlement.

Traders will also be watching Research in Motion , which fell sharply on a disappointing sales forecast late Thursday.

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