By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Newly buoyant stock investors will return Monday to the latest on Spain's banking crisis, economic data from China, and product updates from index juggernaut Apple Inc.
In the past week, Dow Jones Industrial Average (DJI) gained 3.6% to end the week at 12,554; the Nasdaq Composite Index (RIXF) rose 4% to close at 2,858; and the S&P 500 Index (SPX) ended the week up by 3.7% at 1,326. For all three indexes, it was the best week of the year.
The euro-zone crisis, which lately is centered around financial and social upheaval in Spain and Greece, will continue to play a key role in determining investor sentiment next week.
Spain banks, Greece
Spain became the fourth euro-zone country to require international financial assistance on Saturday, as Finance Minister Luis de Guindos said the country will ask the European Union for as much as 100 billion euros ($125 billion) in loans to help its struggling banking sector.
Speaking to reporters Saturday evening following a teleconference call with euro-zone finance ministers earlier in the day, a visibly tense de Guindos said the loans were specifically aimed at the banking sector and not the wider economy.
The loans would be given under "very favorable" conditions and there were no specific economic preconditions, he said.
"The Eurogroup supports the efforts of the Spanish authorities to resolutely address the restructuring of its financial sector and it welcomes their intention to seek financial assistance from euro area member states to this effect," said the Eurogroup in a statement.
The assistance will be provided by the European Financial Stability Facility /European Stability Mechanism.
Greece, and the possibility Athens will take the country out of the euro, could also return as a cause for concern -- or calm -- ahead of June 17 elections.
On Friday, President Barack Obama took a hard line with Greece, saying it would be a mistake for the country to leave the euro zone, and also calling upon the continents' leaders to boost Europe's banking sector.
Late Friday, Moody's Investors Service said, as "Spain moves closer to the need for direct external support from its European partners, the increased risk to the country's creditors may prompt further rating actions." Also if Greece exits the euro, Moody's warned, it could lead to additional pressures on the ratings of other European countries.
"Of course, we will continue to see the ongoing drama from the reality show we call Europe," said Jim Paulsen, chief investment strategist with Wells Capital Management. "This is going to continue to play out."
China data deluge
Chinese data released over the weekend showed the world's second-largest economy is slowing more rapidly than analysts had projected.
China's industrial production grew 9.6% in May from a year earlier, versus 9.3% growth in April, the nation's Statistics Bureau said. The result missed a 9.9% rise expected in separate surveys by Dow Jones Newswires and Reuters.
On the inflation front, consumer and wholesale price gains eased more than expected. The May consumer price index rose 3%, cooling from a rise of 3.4% in April, while the producer price index fell 1.4%, signaling a deepening of the deflation seen in April's 0.7% contraction. The data compared to forecasts for a 3.2% increase for the CPI and a 1.1% contraction in wholesale prices.
Meanwhile, retail sales rose 13.8%, compared to a 14.1% gain in April, and weaker than analyst expectations for a 14.2% rise.
Earlier this week, China's central bank surprised markets around the world when it cut interest rates in an attempt to show support for economic growth.
"I think we're going to see a focus, again, on the macro-economic picture," said Brian Lazorishak, portfolio manager with Chase Investment Counsel. "There's some U.S. economic data coming out. Everybody's also on hold, waiting for the next shoe to drop in Europe."
Shares of Apple (AAPL), the world's most-valuable company by market capitalization and the biggest Nasdaq component, could move Monday when it launches its first gathering of developers since last October's death of its co-founder and iconic chief executive, Steve Jobs.
Apple hasn't said if current CEO Tim Cook will deliver the conference's keynote address, as Jobs often did. The company has said it will give updates on Mountain Lion, the next upgrade to the Mac PC operating system, and iOS, the operating system for the iPad and iPhone.
As Apple hasn't upgraded its line of iMac computers for more than a year, some analysts also expect Apple to unveil a new line of Macs in time for the back-to-school shopping season.
U.S. jobs, factory output
Among the U.S. data likely to get attention will be the first-time jobless claims for the week of June 6-9, with 377,000 claims forecast.
The U.S. industrial production figures for May are also expected to have some bearing on the market on Friday. Economists polled by MarketWatch expect a monthly decline of 0.1%. And the University of Michigan consumer sentiment index for June, which is also scheduled to come out Friday, is expected to slide to 78 from 79.3 in May.
Oil futures, which on Friday snapped a five-week losing streak but ended lower at $84.10 a barrel, could also take the spotlight as the Organization of the Petroleum Exporting Countries meets in Vienna to discuss targets and elect a new secretary general.
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