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Stocks set to surge after surprise euro deal

Stocks are set to surge Friday after euro zone leaders agreed to allow rescue funds to be used to stabilize the region's banks.

Details of the agreement, which includes the creation of a single supervisory body for euro area banks, remain to be worked out.

Still, Italian and Spanish borrowing costs fell as the move surprised markets which had little expectation for any action.

Financial stocks could attract the most buyers in U.S. markets as the risk of exposure to their European peers diminishes.

Equities and other risky assets have been recently weighed down by concerns that stubbornly high borrowing costs in Spain and Italy could force the fourth- and third-largest economies in the bloc to seek bailouts.

In economic news, a report showed consumer spending was flat in May for the first time in five months as Americans eased off on vehicle purchases amid tepid wage growth, but subsiding inflation pressures should keep demand supported.

The Commerce Department said April's consumer spending was revised down to show only a 0.1 percent rise instead of the previously reported 0.3 percent gain.

Weak consumer spending in May also reflected tepid sales at service stations as the pump price of gasoline fell from lofty levels early in the year.

U.S.-traded shares of Research in Motion tumbled after the company delayed the make-or-break launch of its next-generation BlackBerry phones until next year.

Hospitals and insurers providing Medicaid plans for the poor were the main corporate winners from the U.S. Supreme Court's decision Thursday to uphold President Barack Obama's Affordable Care Act, as they prepare to see an influx of newly insured customers with no prior access to healthcare.

Reuters contributed to this report.