Market Morning: Cue the Relief Rally!

NEW YORK (TheStreet) -- U.S. stock futures may be looking up early Thursday but the situation in Europe for the next two years is seen staying pretty dim.

The European Commission has released its autumn forecast, and if Italian bond yields above 7% aren't enough to scare, check out the first line: "The recovery of the EU economy has stopped."

No mincing around there. The numbers the report throws out aren't pretty. GDP is expected to "stagnate until well into 2012" with next year's growth estimated at 0.5%. Unemployment is expected to stick at 9.5%, and the hope is for a "return to slow [GDP] growth" of 1.5% in 2013.

"Growth has stalled in Europe, and there is a risk of a new recession," says Olli Rehn, the commission's Vice-President for Economic and Monetary Affairs, in the release. "While jobs are increasing in some member states, no real improvement is forecast in the unemployment situation in the EU as a whole."

He continues: "The key for the resumption of growth and job creation is restoring confidence in fiscal sustainability and in the financial system and speeding up reforms to enhance Europe's growth potential. There is a broad consensus on the necessary policy action. What we need now is unwavering implementation."

This is all kind of known, of course, but it's still jarring to see spelled out.

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Dow component Walt Disney (DOW) is slated to deliver its fiscal fourth-quarter results after Thursday's closing bell. The average estimate of analysts polled by Thomson Reuters is for earnings of 54 cents a share in the September-ended quarter on revenue of $10.36 billion.

Year-to-date, including a 4% drop ahead of the report during Wednesday's regular session, Disney shares have declined 10%. The stock topped out at $44.34 on March 4 and sank to a 52-week low of $28.19 on Oct. 4, so it's seen a bounce of roughly 20% in the past month or so. At current levels, the shares trade at a forward price-to-earnings multiple of 11.8X based on the fiscal 2012 consensus estimate for a profit of $2.88 per share.

Evercore Partners, which has an overweight rating on Disney, lowered its price target on the stock to $40 from $42 on Oct. 30 and also brought its earnings estimate for the quarter down to 54 cents from 57 cents "despite the fact that DIS results rarely match consensus." Indeed, it's been a mixed bag over the past four quarters, two misses and two beats.

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