) -- A

warning about the obvious

hasn't spooked Wall Street so far but the stakes keep rising for Friday's super summit of Europe's top muckety-mucks.

For all the rhetoric to be spewed over the next few days, the challenge remains to come out of this latest huddle with concrete details of a plan that the


of the Eurozone is 100% behind. France and Germany are showing their unity for a hard line on deficit management and other issues, and that's a positive sign because this is the meeting where all the specifics need to be defined as much as possible.

Gary Thayer, chief macro strategist at Wells Fargo, said Monday the surge in the stock market shows investors are encouraged so far but he cautioned that there are "no easy solutions" at this stage of the game because it's still not clear that everyone is on the same page.

"Investors will be watching to see if the governments with financial troubles will be willing to give up some control over their domestic economy in favor of more coordinated control by the central European authority," the firm said, adding later: "The best investors may hope to see from this week's meetings might be more cooperation and less nationalism."

Unfortunately, if that's the best that comes out of Friday's meeting, it may not be enough to satisfy S&P or Wall Street.

The absence of cooperation, whether it's between the individual countries of the European Union or the Republicans and Democrats in the United States, has been a major factor stoking the volatility that's swept the financial markets since summer, and if rears its head again, the downdraft could be as swift as last week's

spike higher


On the plus side, U.S. stocks have held their gains despite the reality sinking in that Europe is going to be locked in recession over the next few years with conditions seen getting worse before they get better. The action by Standard & Poor's after Monday's close is another test, and stocks seemed to have passed it so far. There's still a good amount of fear in the market though, as evidenced by that persistent 2% yield on the 10-year Treasury, and the tick higher in the



Monday's action

was led by the big banks, which is notable given the disconnect between the financials and the broad market that's existed for most of the past two years.

Bank of America

(BAC) - Get Report


JPMorgan Chase

(JPM) - Get Report

were the top blue-chip gainers, and


(C) - Get Report


Goldman Sachs

(GS) - Get Report


Morgan Stanley

(MS) - Get Report

, and

Wells Fargo

(WFC) - Get Report

all posted smart gains, including a 6% jump for Citi and a nearly 7% advance for Morgan Stanley, which has been clobbered on concerns about its European exposure.

Dick Bove of Rochdale Research broke down the big-picture issues facing the banking industry in a research note early Monday, basically saying the worries about how Europe's problems and the languishing housing market will impact the financials have been "exaggerated meaningfully." Bove continues to pound the table on buying the banks, citing both valuation and his belief that the companies are getting their collective act together.

"Bank stocks are at the lowest prices they are likely to be in this generation," Bove said. "One must put events in perspective. This is not being done at present. Investors are either overly depressed or euphoric. Truth, as it always is, is somewhere in the middle. There are challenges but they are being met in a positive fashion by the banking industry in the United States."

As for Tuesday, the scheduled news is pretty light. The economic data consists of just the Redbook weekly chain-store sales data at 9 a.m. ET. Highlights of the earnings calendar include


(AZO) - Get Report


AgFeed Industries



Casey's General Stores

(CASY) - Get Report


Men's Wearhouse






Toll Bros.

(TOL) - Get Report



(TTC) - Get Report


Vera Bradley

(VRA) - Get Report

, and

Vitesse Semiconductor




Written by Michael Baron in New York.

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Michael Baron


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