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Coming off of its best week of 2012, the S&P 500 tacked on another 1.3% this week. Precarious conditions of Europe remained in focus, but so were economic data, weekend elections in Greece, and an upcoming Fed meeting.

Trade this past week opened in pessimistic fashion as market participants dropped the stock market for a loss of more than 1% upon considering that Spain’s request for $125 billion to shore up its banks might be too little, too late. In fact, Banco Santander had its rating cut by analysts at Fitch, while analysts at Moody’s downgraded Spain’s rating. The yield on the country’s 10-year Note went on to climb to a record high above 7.0% before easing back by the end of the week.

Market participants made note of a bailout request by Cyprus on Tuesday, but were less concerned about the country’s problems than those with larger economies – the Cyprus economy accounts for only 0.2% of eurozone GDP. Buyers eventually made their way back into the fold. Stocks benefited further from a late squeeze that helped the broad market settle at a session high with a gain greater than 1%.

Amid a dearth of corporate announcements Texas Instruments (TXN 27.86, +0.13) attracted positive attention for narrowing its earnings forecast to range from $0.38 to $0.42 per share after it had previously forecasted earnings of $0.36 to $0.44 per share.

In midweek trade stocks rolled over to suffer sizable losses. Financials had offered leadership as JPMorgan Chase (JPM 35.03, +0.38) CEO Jamie Dimon stated in a testimony to the Senate Banking Committee that he expects the bank to be solidly profitable in the current quarter, and that progress has already been made in reducing risk following the firm’s massive trading loss that received so much attention several weeks ago.

Prior to the stock market’s downturn participants had also attempted to shrug off lackluster retail sales, which declined during May by 0.2% when a 0.1% decline had been broadly expected. Excluding autos, retail sales declined by 0.4%, which contrasts with a Briefing.com consensus that called for no change. Prior month numbers were revised downward so that overall retail sales declined by 0.2% and sales less autos declined by 0.3%.

Producer price data for May featured a 1.0% increase in overall producer prices and a 0.2% increase in core producer prices. The Brieifng.com consensus called for a 0.7% decline in overall prices and a 0.2% increase in core producer prices. Consumer price data came the next day. Overall consumer prices declined during May by 0.3%, while core prices increased by 0.2%. Economists polled by Briefing.com had expected, on average, a decline in overall prices of 0.2%, but an increase in core prices of 0.1%.

Also out on Thursday was the latest weekly initial jobless claims count, which increased to 386,000 from 380,000 when a tally of 375,000 initial claims had been expected, on average, among economists polled by Briefing.com.

Despite the generally underwhelming nature of the data, sentiment strengthened as participants regarded it as possible fodder for the Fed to take accommodative action when it meets next week. Stocks were also helped by headlines purporting that central banks will respond with a coordinated effort, if necessary, after political elections are held in Greece this coming weekend. Those themes helped drive the stock market to a gain on the order of 1%.

In the face of broad market strength sharp losses were suffered by Nokia (NOK 2.48, +0.13) and Credit Suisse (CS 18.88, +0.91). Shares of the former plummeted in response to the company’s pessimistic profitability forecast, while the latter was hurt by concerns that the firm will move to raise new capital at the urging of officials.

The idea that disappointing data will help encourage the Fed to enact another round of quantitative easing remained a theme in the final session of the week. Short covering likely helped push the stock market up 1% to a one-month high, while the dollar declined to a three-week low.

The Empire Manufacturing Survey for June fell to 2.3 from 17.1 in the prior month. Many had expected the Survey to ease down to just 13.5. Also in play was the University of Michigan’s preliminary survey of consumer sentiment for June. The Survey fell to 74.1 from the 79.3, though it had been expected to come in closer to 77.0.

For most of the session Tech stocks provided leadership after a lackluster display in the prior session. As a group, Tech stocks scored a 1.4% gain. That was matched by Financials, which had traded with only a middling gain for most of the morning and early afternoon. The biggest bounce was booked by Energy, though; the sector rallied 1.8%.

Telecom stocks were at the opposite end of the spectrum. The defensive-oriented sector settled with a 0.1% gain.

The dollar had actually traded with moderate strength overnight, but ultimately drifted into the red so that by the stock market’s closing bell it was down about 0.6% against a basket of major foreign currencies. For the week the dollar declined more than 1%.The dollar’s decline on Friday was largely due to a stronger yen, such that the dollar-yen exchange rate fell 0.9% to about 78.7. The sterling pound also garnered buying interest; it advanced 1.0% to $1.57. The euro was up solidly overnight, but pulled back so that it was flat for most of Friday. By the closing bell it was up 0.2% to about $1.27.

The expiration of quarterly options drove share volume on the NYSE to far above average daily volume trends for the past several months.

Although participants displayed an increased tolerance for risk, Treasuries still benefited from healthy demand. In turn, the yield on the benchmark 10-year Note moved back below 1.60%.

Gold also gained. The yellow metal pushed up about 0.5% to a little more than $1628 per ounce. For the week it advanced more than 2%.

Crude oil prices oscillated on Friday before they settled with an incremental gain only pennies above $84 per barrel. The energy component's price slipped by only pennies from the prior week. As an aside, OPEC announced earlier this week that it plans to keep daily oil production at 30 million barrels.

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