That could offer some respite from a string of weak U.S. economic data and the earnings season winding down.

Markets worldwide have closely watched developments in Europe for the past several months, with calls for austerity seen as positive for stocks as they seek to prevent a credit crisis in the region that could take down or deeply hurt the global economic recovery.

But an economic slowdown throughout the region has amplified calls for a change of direction.

In France, the prospect of a victory by Francois Hollande over conservative incumbent Nicolas Sarkozy, which would instate the country's first Socialist president since 1995, initially alarmed some investors. Hollande's win could be a hurdle to the German-led drive for austerity in Europe.

Adding to the markets' jitters: Anti-bailout parties are expected to perform well in Greece's vote on Sunday, raising the risk of more opposition to already unpopular reforms.

"There's potential for uncertainty and instability in Europe," said John Praveen, managing director of Prudential International Investment Advisors in Newark, New Jersey. "The market is pricing in extremely negative scenarios."

Praveen said there is still room for a market rebound if Hollande, should he win the presidency, comes out with a more conciliatory tone that would ease investors' fears about France's commitment to fiscal stability.

Investors are waiting to see if Hollande, who holds an advantage in polls over Sarkozy, will be able to square France's need for fiscal reforms with his plans to promote growth.

"I'm not quite sure, regardless of who wins, does it say 'sell the S&P'? ... It just continues the uncertainty, no matter who wins," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.

TECHNICALS RULE IN A LIGHT WEEK

Technical levels could regain importance next week as the U.S. economic data calendar thins and fewer than 30 of the S&P 500 components are expected to report earnings.

"On no news, we all start looking at charts," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati.

"We found support recently on the S&P near 1,360. If we violate that, it would be a bad sign," he said.

The S&P 500 slipped below that level twice last month and bounced back, but has since found strong resistance at 1,400. The recent soft economic data, capped with Friday's payrolls report showing the third straight month in which hiring had slowed, has dampened hopes for a convincing break upward.

The data dragged the market lower. The S&P 500 and the Nasdaq Composite posted their worst weeks this year. For the week, the Dow Jones industrial average .DJI dropped 1.4 percent, the Standard & Poor's 500 Index .SPX slid 2.4 percent and the Nasdaq .IXIC lost 3.7 percent.

The high points of next week's economic calendar will come on Friday, with the U.S. Producer Price Index for April and the preliminary reading for May on consumer sentiment from the Thomson Reuters/University of Michigan surveys.

In terms of earnings, the top names next week include Dow components Walt Disney Co (DIS.N), which reports on Tuesday, and Cisco Systems (CSCO.O), due Wednesday.

Wednesday will also bring Macy's (M.N) earnings report, followed Thursday by Kohl's (KSS.N), which will be dissected for clues on the mood of U.S. consumers.

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com )

(Reporting by Rodrigo Campos, Additional reporting by Edward Krudy; Editing by Jan Paschal)

• A Permanent Economic Emergency