Updated from Tuesday, Nov. 1, with additional news from Greece and Sony's earnings

NEW YORK (

TheStreet

) -- It seems the

flair for drama is alive and well in Greece

, turning last week's relief rally into fodder for a nostalgic flashback.

At 1218, the

S&P 500

is now sitting 2% below where it was

before

last Thursday's monster surge on news that European leaders had a plan in place to solidify the region and render the threat of sovereign debt contagion more intermittent than constant. But then Greece Prime Minister George Papandreou called for a popular vote on accepting the deal, and now all bets are (once again) off.

What the end game is here is tough to speculate on. In Greek tragedies, the protagonist doesn't realize his or her tragic flaw until it's too late, and events are already set in motion that bring the action to some sad but inevitable end. The talk now is of emergency cabinet meetings and no-confidence votes, and Papandreou's decision to make sure the people are on his side before going any further down this road looks downright comical. If Greece ends up defaulting, the resulting script will do Aeschylus proud.

Among the biggest losers stateside Tuesday were the financials with

Bank of America

(BAC) - Get Report

falling 6.3%;

Citigroup

(C) - Get Report

coughing up nearly 8%; and

JPMorgan Chase

(JPM) - Get Report

, dropping 5.9%. S&P Capital IQ downgraded the trio late in the session, citing the cloudy global outlook and international lending exposure, given the fresh uncertainty in Europe.

The banks have rarely led the market during this volatile bull run since the financial crisis, and the idea that they would start to show some strength after a decent showing this earnings season takes a big hit here. Ironically, Citigroup was the recipient of an upgrade from Credit Suisse on Tuesday morning. The firm lifted its rating to outperform from neutral and goosed its 12-month price target nearly 7% higher to $48 from $45.

With Citigroup stock down more than 30% year to date prior to Tuesday's weakness, this was basically a valuation call with the firm saying the risk/reward profile is compelling at current levels, i.e. Monday's closing price of $31.59.

"The current risk/reward on the shares is attractive, with a disconnect between the shares trading at 0.6 times tangible book value and our forecasts of ROTE

return on total equity of 9% in 2012 and ability to generate a double-digit ROTE for the core Citicorp," Credit Suisse said. "We look for solid book and tangible book value growth in 2012 and 2013, which should lead to an improved valuation and further support upside in the shares."

The firm is also expecting a "modest" dividend increase from Cititgroup in the second quarter of next year, and says Citi's strong global presence should help it book stronger revenue and loan growth than its peers over the next few years.

A pretty out-of-touch call, given the market's troubles on Tuesday. That's forgivable, of course, but it's fair to say

Credit Suisse

(CS) - Get Report

ought to have been a bit more cautious, considering

the headlines it was making

before the open.

Anyway, Ben Bernanke and the

Federal Reserve

will look to grab the market's attention away from Europe, at least for a little while, on Wednesday afternoon when the central bank's open market committee wraps up its last

two-day meeting of 2011

.

Shifting from "Operation Twist" to "QE3" is a long shot but this statement could be an important one, judging by the groundwork the Fed chief laid in a

speech on Oct. 20

when he telegraphed a possible move away from using just inflation to set monetary policy. Nominal GDP and unemployment could become more of a focus in the future, a major change.

Research firm

Capital Economics

doesn't think the Fed will pull the trigger on QE3 until the first half of 2012 as it waits for core inflation to drop below 2%, and it expects Wednesday's statement to go beyond the central bank's current promise for "exceptionally low levels of the federal funds rate" through mid-2013, at least.

"The most likely option is that the Fed will make its forward-looking guidance more explicit, by pledging to leave short rates at near zero until the unemployment rate falls below a certain level," the firm said.

Whatever the statement says, the press conference with Bernanke should be entertaining, given it will be his first grilling since that Oct. 20 speech and the QE3 chatter is only going to get louder.

As for Europe, Capital Economics expects the situation to get worse before it gets better, saying Papandreou's move has brought the chance for a messy default back into play. That along with

MF Global's

( MF) implosion and gnawing doubts about how to leverage up the European Financial Stability Facility seems to have erased any optimism the firm had about Europe getting its house in order.

"We expect the crisis to build, prompting a prolonged recession in the euro-zone, further turmoil in the markets and, at some point, the end of the euro itself in its current form," Capital Economics wrote.

On Wednesday, Greek Prime Minister George Papandreou received the backing from his cabinet on a referendum on the financial bailout. But Papandreou now has to win over the leaders of France and Germany. The Greek prime minister was summoned for crisis talks in Cannes. France's Nicolas Sarkozy and Germany's Angela Merkel want a quick implementation of the deal.

Back in the U.S., investors get a fresh batch of jobs data on Wednesday with the monthly report on layoffs from outplacement firm Challenger Gray & Christmas at 7:30 a.m. EDT and the employment change estimate from payrolls company Automatic Data Processing at 8:30 a.m. The ADP report carries more weight but is known as a less-than-reliable predictor of the government number, which is due on Friday.

The consensus estimate is for the ADP report to show 100,000 jobs added in October, up from 91,000 in September.

Briefing.com

is a bit more optimistic at 130,000.

Wednesday's other data includes the Mortgage Bankers Association's weekly mortgage applications index at 7 a.m., and crude inventories for last week at 10:30 a.m.

Among the big names issuing quarterly reports on Thursday are

Clorox

(CLX) - Get Report

,

Mastercard

(MA) - Get Report

, and Dow component

Kraft Foods

( KFT).

Mastercard goes under the microscope this time around. Shares of the credit card issuer have been a fine place to park your money this year, rising more than 50% so far in 2011, as folks continue to use plastic every chance they get. The average estimate of analysts polled by Thomson Reuters is for a profit of $4.81 a share for the fiscal third quarter ended in September on revenue of $1.71 billion.

The company beat the consensus EPS view by more than 50 cents in the second quarter, and has delivered an upside surprise in the past six quarters, so Wall Street is likely banking on another strong beat. The stock reached a 52-week high of $361.94 on Sept. 20 then pulled back below $300 when the market swooned in early October. It's rallied back to close Tuesday at $334.30. The sell side remains bullish with 26 of the 33 analysts covering the stock at either strong buy (16) or buy (10), and the median 12-month price target at $380.

Sterne Agee previewed the report over the weekend, saying it expects at least an in-line performance, especially since rival

Visa

(V) - Get Report

has already turned in a solid quarter. The firm is below consensus though, expecting a pro forma profit of $4.65 a share on revenue of $1.72 billion, with operating margins seen taking a hit from acquisitions and higher incentive expenses.

As for valuation, Sterne Agee is comfortable with its price target of $390, saying it believes Mastercard can justify a multiple of around 18X forward earnings. Based on Monday's close, the stock was at 16X the current fiscal 2012 consensus estimate for a profit of $20.84 a share.

"Even with the stock near its highs, we continue to see good value in MA shares as we believe visibility into 20%+ EPS growth remains high and the clouds surrounding the Durbin Amendment have mostly cleared," the firm said. "Over the years ahead, we expect MasterCard to deliver strong organic revenue growth, operating leverage, a declining tax rate, and a declining share count, all of which create a formula for strong EPS growth, in our view."

Other notable reports on the a.m. roster include

AOL

(AOL)

,

Clean Harbors

(CLH) - Get Report

,

Comcast

(CMCSK)

,

Consolidated Graphics

(CGX)

,

Devon Energy

(DVN) - Get Report

,

Dunkin' Brands Group

(DNKN) - Get Report

,

El Paso

(EE) - Get Report

,

Edison International

(EIX) - Get Report

,

Great Wolf Resorts

( WOLF),

Kenneth Cole Productions

(KCP)

,

Level 3 Communications

(LVLT)

,

Marsh & McLennan Cos.

(MMC) - Get Report

,

Molson Coors Brewing

(TAP) - Get Report

,

RR Donnelly

(RRD) - Get Report

,

Tidewater

(TDW) - Get Report

,

Time Warner

(TWC)

,

Vonage Holdings

(VG) - Get Report

, and

WellCare Health Plans

(WCG) - Get Report

.

Sony

(SNE) - Get Report

reported early Wednesday a fiscal second-quarter loss of 27 billion yen ($346 million) and said it expects an annual loss for the fourth year in a row.

The after-close flood of numbers includes

Affymetrix

(AFFX)

,

Alamo Group

(ALG) - Get Report

,

Cbeyond

(CBEY)

,

Clearwire

(CLWR)

,

Extreme Networks

(EXTR) - Get Report

,

Foot Locker

(Z) - Get Report

,

Foster Wheeler

(FWLT)

,

General Maritime

(GMR)

,

Georgia Gulf

(GGC)

,

Goodrich Petroleum

(GDP) - Get Report

,

Hanesbrands

(HBI) - Get Report

,

Intrepid Potash

(IPI) - Get Report

,

Local.com

(LOCM)

,

News Corp.

(NWSA) - Get Report

,

Nutrisystem

(NTRI) - Get Report

,

Oclaro

(OCLR) - Get Report

,

Prudential Financial

(PRU) - Get Report

,

QUALCOMM

(QCOM) - Get Report

,

Tesla Motors

(TSLA) - Get Report

,

THQ

(THQI)

,

Transocean

(RIG) - Get Report

,

ValueClick

(VCLK)

,

Vulcan Materials

(VMC) - Get Report

,

WebMD Health

(WBMD)

,

Whole Foods Market

( WFMI), and

Zipcar

( ZIP).

And finally, Tuesday's after-hours action saw a raft of revenue misses, including

Atmel

(ATML)

,

OpenTable

(OPEN)

, and

Wright Medical Group

(WMGI) - Get Report

, as well as a relatively decent report from

JDS Uniphase

(JDSU)

, whose shares rose in

after-hours action

, despite the company scaling back its outlook for the current quarter to reflect the impact of flooding in Thailand.

--

Written by Michael Baron and Joseph Woelfel in New York.

>To contact the writer of this article, click here:

Michael Baron

.

>To submit a news tip, send an email to:

tips@thestreet.com

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.