GOOD MORNING. European markets are edging downwards. Asian markets finished mixed. US futures are pointing to a slightly higher open.

Investors may be looking toward developments in Europe this morning. Leaders of European Union governments have agreed to conduct public stress tests of their banks, the Wall Street Journal reports. Given the impact the debt crisis in Europe has been having on US markets in recent months, the news could bring some reassurance to investors--though ultimately it will depend on the results of the tests. German banks, heavily exposed to Spanish debt, had opposed such a move. Details on exactly what worst-case scenarios will be used in the tests have yet to be worked out.

European bank stocks rose following the news. A successful debt auction in Spain Thursday also helped push the euro higher. Data from overseas has been driving the US market in recent weeks and in some cases helping to mask disappointing news at home, like continuing high rates of new jobless claims, Paul Nolte, the managing director of Dearborn Partners, wrote in a report this week.

US stocks appear to be trading in a fairly tight range, between a floor of 1040 and a ceiling of 1100 on the S&P 500, Nolte wrote. A break from that range could signal something much more enduring, he wrote. For now, stocks seem to be moving sideways.

Next week, investors can watch for data on new and existing home sales and a revised reading on GDP for the first quarter. The Fed s Open Market Committee also releases its next statement on monetary policy Wednesday.

IN OTHER NEWS:

• It appears that a requirement that banks break their swaps desks off into separate affiliates will remain in the financial reform legislation. LINK
• Citigroup (C) is moving ahead with plans to raise $3 billion for its private equity and hedge funds despite the threat of the Volcker Rule restricting banks ability to own alternative funds. LINK
• In his first interview with a US newspaper since taking office, Russian President Dmitry Medvedev spoke with the Wall Street Journal about the euro, BP (BP), and more. LINK