Markets are bracing for the Supreme Court ruling on health care in the week ahead and it could be a positive catalyst for stocks if the new law is overturned.

But any pop is likely to be brief and the focus will return to Europe as the European Union leadership gathers to discuss a banking union at the end of the week. Early in the week, the focus will be on Greece's efforts to restructure its bailout and Spain's expected request Monday for funds to recapitalize its banks. There is also a stream of U.S. economic data, including durable goods, weekly jobless claims and consumer confidence readings.

The Supreme Court decision on President Obama's health-care reforms could possibly come Monday but certainly by the end of the week. Some analysts say if the law is overturned, stocks could instantly spring into rally mode, though that could be short-lived since uncertainties remain. Health-care stocks have been moving higher ahead of the ruling on the Affordable Care Act, and were the best-performing sector in the past week, gaining 0.8 percent.

"The initial reaction (if overturned) will be that this is positive because it had a dampening effect on small business hiring and small business confidence," said Barry Knapp, head of equity portfolio strategy at Barclays Capital. But he said any rally will be unsustainable. "It still leaves a block of uncertainty and that uncertainty also relates to the election results Is it positive for Romney? Is it positive for Obama? Both cases could be made. In the short term, it's not going to move the market that much."

Knapp said if health-care reform is not overturned, or just partially overturned, stocks could react negatively. "It' not so clear what happens to the health-care sector stocks. I think the first reaction will be up, but you have to wonder about HMOs. There was a view they could have a much bigger customer base," he said.

The justices are deciding whether Congress exceeded its authority by passing the law, which mandates individual health-care insurance. They could decide to throw out all of the law, part of it or keep it intact.

Analysts have said the market could read a ruling against the Affordable Care Act as a negative for Obama because he has invested so much personal capital in a law that could be deemed unconstitutional and the process has been disruptive across the economy. On the other hand, there is a sense a rejection could galvanize his supporters, a negative for GOP candidate Mitt Romney.

Euro Driven

But the bigger driver of markets remains Europe's debt crisis and expectations for the EU leaders' summit are relatively low.

"We think what is likely is another half-hearted set of solutions to the problem," said Pimco strategist Tony Crescenzi. He said one problem is there's "bailout fatigue" on the part of creditors, and "austerity fatigue" on the part of countries that have to make tough choices to curb spending.

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Health-Care Ruling May Be a Catalyst for Stocks