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All Eyes on Europe, Jobs Report in Coming Week

NEW YORK ( TheStreet) -- Yes, there's a big jobs report waiting next Friday, but investors will continue to be on pins and needles about news out of Europe in the coming week.

The major U.S. equity indices managed a positive overall finish last week, snapping a three-week losing streak, but that was really more a product of how poorly equities had already performed in May. For example, as of Friday's close, the Dow Jones Industrial Average has logged only four positive sessions this month.

If the blue-chip index can't muster an up day next week, you would have to go back to September 1903 to match that level of ugliness, according to data provided by Dow Jones Indexes.

There's a good chance that Friday's mild selloff would have been a lot worse if it weren't a low-volume lead-in to Memorial Day weekend.

The headlines from Europe took a turn late in the day, and for once, Greece wasn't the main problem.

Spain stepped up with Bankia -- already partially nationalized -- estimating it's going to need nearly $24 billion in additional bailout funds from the Spanish government.

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Standard & Poor's did its part as well, downgrading a number of the country's prominent banks because of recessionary concerns.

All this comes against the backdrop of the rising talk that Greece exiting the euro is a distinct possibility. Europe's leaders paid a lot of lip service this week to their commitment to keeping the country in single-currency bloc but crossing the line from rhetoric to action hasn't happened yet.

"I'm predicting that five years from now, the euro won't exist," said Kevin Mahn, the president of Hennion & Walsh Asset Management.

"Greece will be the first to exit and return to the drachma," he added. "The intentions behind the euro were good, to try to make a formidable trading bloc with the rest of the world, but it comes to pieces with a crisis in one of the member countries, and now they all have to agree on how to bail out that country."

The Dow Jones Industrial Average rose 85.37 points, or 0.69%, to finish the week at 12,454.83. The S&P 500 increased 22.09 points, or 1.7%, to close at 1,317.82 on Friday. The Nasdaq Composite gained 53.95 points, or 1.94%, to end the week at 2,837.53.
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Chart of I:DJI
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