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Market Preview: Brussels Calling

NEW YORK ( TheStreet) -- The eurocrats are getting together again and it seems investors have gotten past the prospect that the outcome of this latest meeting will be disappointing.

After all, how can the two-day summit disappoint when so many expect so little? Capital Economics analyst Ben May is squarely in the low-expectations camp, arguing earlier Wednesday that "little of substance is likely to emerge" from the two-day confab in Brussels.

"[W]e already know that more radical suggestions to tackle the region's problems were removed from the final version of the report published by European Council President Van Rompuy outlining a path towards fiscal and banking union," he noted. "And there is no sign that either Germany, which is opposed to providing more funds without central budget supervision, or France, which is against ceding power to the EU, are willing to alter their stance radically. The upshot is that policymakers look set to disappoint again."

On Monday, when the major U.S. equity averages were tanking amid a flurry of worrisome headlines, including Cyprus hopping on the bailout bandwagon, Spain putting in its formal but non-specific request for a rescue package for its banking system, and Greece's finance minister resigning, this summit was being billed as a big deal.

But factoring in Wednesday's modest advance, stocks are still down but back to within shouting distance of where they ended last week.

Sharon Stark, Sterne Agee's chief market strategist, expressed some tentative hope earlier in the week that Europe's leaders will eventually realize that "there will only be losers in the game of 'kick the can'" and find some motivation to compromise and take bold action. What German Chancellor Angela Merkel says and does this time around will get the most attention, Stark said.

"One of the many puzzling observations in Europe is the seemingly lack of urgency on the part of Germany to develop a true rescue plan," she said. "As Greece, Italy, Spain struggle to stay above water, instead of throwing out lifesavers to the countries, Merkel tells them to learn how to swim."
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