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NEW YORK (CNNMoney) — Investors across the globe wait with bated breath ahead of Sunday’s pivotal elections in recession-ravaged Greece.
Victory for the far-left anti-austerity parties could unravel Greece’s bailout, raising concern the country could exit the euro currency union. And that could drag down other ailing euro nations and send shock waves through the world’s financial markets.
In the United States, stocks managed to end the week with modest gains as investors remained hopeful that Greece’s elections would yield a resolution. The Dow () rose 0.9%, the SP 500 ( ) added 1% and the Nasdaq ( ) picked up 1.3% on Friday.
All three indexes ended higher for a second straight week. The Dow jumped 1.7% and the SP 500 rose 1.3% for the week, and the Nasdaq gained 0.5%.
Greece will be front and center as world leaders meet in Mexico on Monday for the Group of 20 summit. Analysts are expecting a lot of talk but not a lot of action. In other words, status quo as far as finding a definitive solution for Europe goes.
“It will make a lot of noise, but the most it will do is reiterate that Europe must fix its problem, and that it should come from within the European Union group,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “The real emphasis will be at the end of the month when we have an EU summit, where there will likely be some concrete moves.”
Some analysts do expect more from the Federal Reserve when policymakers wrap up a two-day meeting Wednesday.
Investors will be listening carefully to Fed Chairman Ben Bernanke during his press conference following the meeting for clues about possible Fed action. There’s speculation the central bank may extend Operation Twist, its program to swap short-term bonds for the longer-term Treasuries, or any other stimulus measures.
“There’s a good possibility that the Fed will decide to extend Operation Twist, which is somewhat of a Band-Aid,” said Timothy Ghriskey, chief investment officer at Solaris Asset Management.
“But economic data hasn’t been weak enough to warrant any other significant action,” he said.
Washington could send a jolt through the market early in the week, if the Supreme Court hands down a ruling on the Affordable Care Act. That could come as early as Monday.
While the court is focused primarily on the law’s individual mandate provision, which requires most Americans to buy health insurance or face financial penalty, the justices could strike down the entire legislation.
Large insurers like UnitedHealth Group (Fortune 500), WellPoint ( , Fortune 500) and Aetna ( ) have a lot riding on the fate of the landmark law, which promises to remake the health insurance landscape. Its primary provisions are set to begin in 2014.,
And JPMorgan Chase (Fortune 500) CEO Jamie Dimon will head back to Capitol Hill on Tuesday to testify before the House Financial Services Committee.,
Dimon will field questions from lawmakers about the bank’s risky financial bets that resulted in more than$2 billion in losses.
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