Euro zone leaders agreed overnight to take action to bring down Italy's and Spain's spiraling borrowing costs and to create a single supervisory body for euro zone banks by the end of this year, a first step towards a European banking union.

The U.S. Commerce Department releases May personal income and consumption data at 1230 GMT. Economists expect a 0.2 percent rise in income and an unchanged reading in spending. In April, income rose 0.2 percent and spending was up 0.3 percent.

The Institute of Supply Management Chicago releases its June index of manufacturing activity at 1345 GMT. Economists forecast a reading of 52.5, compared with 52.7 in May.

U.S. securities regulators may force Nasdaq OMX Group Inc (NDAQ.O) to upgrade its trading systems following last month's glitch-ridden IPO of Facebook Inc (FB.O), the Wall Street Journal reported.

The Indian unit of General Motors (GM.N) expects to stop production at its plants for one day a week until the festive season, due to slow demand, its head said on Thursday.

Ford Motor Co (F.N) said second-quarter losses from its operations outside North America could be triple the $190 million it posted in the first quarter, hurt by continued weakness, mainly in Europe.

The final reading of the Thomson Reuters/University of Michigan Consumer Sentiment Survey for June is due at 1355 GMT. Economists predict a reading of 74.1, unchanged from the preliminary figure.

At 1430 GMT, the Economic Cycle Research Institute releases its weekly index of economic activity for June 22. In the prior week the index read 121.3.

JPMorgan Chase & Co.'s (JPM.N) internal controls have come under increased scrutiny by regulators who have asked the bank to demonstrate its risk models are working properly, the Wall Street Journal reported, citing to people close to the situation.

British buyout group Melrose (NYN.L) announced on Friday an agreed deal to buy German utility meter maker Elster Group (E8D1.F) (ELT.N) for $2.3 billion in its first major deal for four years.

Research In Motion Ltd (RIM.TO) (RIMM.O) delayed the make-or-break launch of its next-generation BlackBerry phones until next year, in a setback to the once-dominant technology company whose sales are crumbling.

The FTSEurofirst 300 index .FTEU3 of top European shares rose 1.6 percent, while Japan's Nikkei average .N225 rose 1.5 percent after European leaders agreed overnight to take emergency action to lower borrowing costs for Italy and Spain.

U.S. stocks fell on Thursday but pared back sharp losses late in the session on talk of progress by European leaders in easing the region's debt crisis, while a Supreme Court ruling upholding a landmark healthcare law hit large health insurers.

The Dow Jones industrial average .DJI dropped 24.75 points, or 0.20 percent, to 12,602.26. The Standard & Poor's 500 Index .SPX shed 2.81 points, or 0.21 percent, to 1,329.04. The Nasdaq Composite Index .IXIC lost 25.83 points, or 0.90 percent, to 2,849.49.

(Reporting by Atul Prakash; Editing by John Stonestreet)

• A Permanent Economic Emergency