Dow Edges Up Today; Monster Week Ahead

The Dow Jones Industrial Average (INDEX: ^DJI) is rising again today, up 0.56% at 1:45 p.m. EDT. The driving force for gains this week seems to be optimism that regardless of the outcome of Greece's Sunday election, central banks are ready to take action to ensure the euro doesn't fall apart. The other common theme seems to be speculation.

Shadow opinion polls driving heady speculation
Greek law prohibits opinion polls from being released within two weeks of an election. That's left whisper numbers and reports of "secret" opinion polls to drive market sentiment. Such rumors of the anti-bailout party Syriza losing steam circulated yesterday and were enough to help push the Athens Stock Exchange up 10%! Speculation was especially rampant around Bank of Greece (NYS: NBG) , which has seen its shares soar 49% in the past two days based mostly on hope Greece can stay in the eurozone.

What of the elections?
Speculations aside, here's what you need to know about the Greek election this weekend. Polls will be closed closed at noon EDT on Sunday. Exit polls will be released immediately, but with the latest estimates showing the New Democracy party (which supports measures to stay in the euro) and Syriza (the anti-bailout party) with one percent of each other, results could be well within an initial margin of error.

While markets will likely react in an outsized way on Monday depending on the results, barring an unexpectedly high turnout for Syriza that would give the party more clout in forming its coalition, the likely case isn't a quick exit from the euro. The more likely scenario is a situation where the European Central Bank continues payments to Greece while political parties in Greece -- likely led by New Democracy -- push back on austerity measures.

It's hard to believe, but we're likely looking at a pretty similar long-term situation in the country. Of course, that doesn't rule out yet another election in the country.

Other events to watch in the week ahead
The events in Greece could likely lead to several other domino effects. If Syriza does pull off an unexpectedly strong result on Sunday, Spanish yields would once again be on the rise. With yields on Spanish 10-year bonds closing at 6.92% yesterday, any negative news could push Spain's borrowing costs to the point where more Central Bank action would be needed to assist that country as well.

The Federal Reserve will meet on Tuesday and Wednesday, which should shed light on the likelihood of future stimulus from the Fed -- or an extension of Operation Twist. Also, leaders of the G20 nations will meet in Mexico next week, with Europe at the center of discussions.

Today's winners
Looking back to today's action, 25 Dow companies are seeing gains on the day. The largest gain comes from Microsoft (NAS: MSFT) . The company is reported to be on the cusp of acquiring social enterprise company Yammer in a move which should strengthen its Office lineup. Office has passed Windows as Microsoft's most profitable business unit. Right behind Microsoft, Intel (NAS: INTC) is the second-biggest mover on the Dow, posting a 1.45% gain behind analyst upgrades. Overall, tech leads all sectors, up 1.14% today.

Take the long-term view
That's it for our checkup of the market today. If you're on the lookout for great stock ideas, but are spooked by Europe, your best play is to discover great companies that can continue excelling over the long run even if the economy slumps. One of the best places to find these kinds of exceptional companies is the Dow. In our new free report introduced just this week, "The 3 Dow Stocks Dividend Investors Need," our analysts outline the three Dow stocks with an X factor that makes them stand out from their illustrious peers. This is an opportunity to be one of the first to read this feature report, so click here now to secure your copy -- it's completely free of charge.

At the time thisarticle was published Eric Bleeker owns shares of National Bank of Greece. He kind of whiffed on that one. The Motley Fool owns shares of Intel and Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft and Intel. Motley Fool newsletter services have also recommended creating a bull call spread position in Microsoft. The Motley Fool has a disclosure policy.
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