NEW YORK ( TheStreet) -- Europe has made a believer out of Wall Street and suddenly the major U.S. equity indices -- thanks to 10%-plus rallies off their Oct. 4 intraday lows -- have a realistic shot at finishing a volatile 2011 in positive territory.

The Dow Jones Industrial Average made a foray above its 2010 close of 11,578 during Wednesday's session, peaking at 11,625, but the S&P 500 still has a ways to go, closing at 1207, a good 4% below its 2010 finish at 1258.

Standard & Poor's noted late Wednesday that the S&P 500 has experienced 22 year-to-date declines of between 10%-20% since 1900, and the index subsequently has posted a median decline of 4.5% through the remainder of the year, rebounding to close higher on the full year a surprising 41% of the time.

"As a result, the odds favor, but don't guarantee, a down year for the S&P 500," the S&P commentary states. "Although the bottom may have been recorded earlier this month, we believe it may be too soon to say that a new cyclical surge is at hand."

S&P doesn't expect the U.S. to slip into recession; instead it's leaning toward a "half-speed" recovery held in check by the still weak housing market and soft consumer spending, and it's not completely sold on the idea that everything's going to be okay across the pond.

"Even though we are encouraged by increasingly proactive commentary from European officials, we believe the devil is in the details and much remains to put the E.U. crisis to rest," S&P said. "We won't take the bait on declaring the coast is clear when we aren't sure that it is."

There's a good bit of truth in that. Right now, the fix still seems a little too easy, as if the problem all along was simple cooperation, not real systemic risk. Still, it's hard to ignore the conviction shown by the recent run-up in stocks with the Dow gaining 11.2%, the Nasdaq rising 13.3%, and the S&P 500 rebounding 12.3% from those Oct. 4 intraday lows. S&P puts the next area of resistance for the S&P 500 in the 1220-1230 range, so stay tuned.

JPMorgan Chase ( JPM) is the big morning report on Thursday, and the Dow component's performance is sure to color expectations for the rest of the big banks, which will follow early next week. The average estimate of analysts polled by Thomson Reuters is for Jamie Dimon & Co. to post earnings of 91 cents a share in the September quarter on revenue of $23.4 billion. As recently as a week ago, the consensus view was for a profit of 99 cents a share.

It's been an abysmal year for the banks who are still dealing with toxic mortgage assets, the cloud cast by the foreclosure processing scandal, and concerns about exposure to possible sovereign debt contagion in Europe; all while facing new regulatory hurdles that have cut into fee income and a paucity of lending opportunities because of continued high unemployment and depressed home values. More reserve releases should counter some of these forces though.

JPMorgan shares enjoyed a modest 3% rally in Wednesday's session but are still down more than 20% so far in 2011. That's good for second best among its big bank brethren with Wells Fargo ( WFC) down just 16%, but Citigroup ( C), off 44%, and Bank of America ( BAC), losing more than 50%.

Wall Street is exceedingly bullish on JPMorgan with 32 of the 34 analysts covering the stock at either strong buy (13) or buy (19), and the median 12-month price target at $50, implying potential upside of nearly 50% from current levels.

Evercore Partners previewed JPMorgan's report on Oct. 3, maintaining an overweight rating but bringing its third-quarter earnings estimate down to 92 cents a share, which was below-consensus at that time. The firm has a $46 price target on the stock.

" We maintain Overweight based on our view that JPM will continue to generate above-average results, gain market share, and reap the benefits of being one of the strongest financial institutions globally," Evercore said. "We've witnessed this in the recent past and expect JPM to again prove how it deserves to trade at a significant premium given its breadth of businesses, strong fundamentals, and management depth and credibility, in effectively navigating through a still challenging environment."

Of course, if JPMorgan doesn't deliver and its results are worse than anticipated, the premium the stock enjoys will either dissipate or the other banks will have to sink accordingly.

After the closing bell, Google ( GOOG) will be in the spotlight with its third-quarter numbers. Wall Street's consensus view is for earnings of $8.74 a share on revenue of $7.21 billion in the September-ended period.

The Internet search giant, which is aggressively expanding to compete with Facebook through its Google+ application, and Apple ( AAPL) with its Android mobile operating system, has topped the average analysts' estimate in six of the past eight quarters.

Jefferies & Co. is confident that Google is still eating the lunch of both Yahoo ( YHOO) and Microsoft's ( MSFT) Bing when it comes to search traffic, grabbing more and more advertising dollars.

"While Google's share of US queries is relatively flat at 65%, its share of ad dollars is 80%+, driven by both volume and performance," the firm said in commentary on Oct. 10. "Volume for 3Q (+14% Y/Y, by our estimate) was likely driven by high-teens growth in Int'l clicks and high-single digit growth in US (vs. +18% in 2Q11.)"

The consensus revenue view calls for a sequential decrease of 4% on the top line but Jefferies notes that year-over-year growth is still an impressive 30%-plus. The firm, which has a buy rating on Google shares with a price target of $830, thinks the stock may be range-bound in the short term as investors wrestle with what the company's strategy is for Motorola Mobility ( MMI) beyond the patent portfolio, and wait to see if Google + is building up traction and how serious regulatory inquiries will be.

Birinyi Associates notes that the day after the company's earnings report, Google shares trade down 60% of the time. Adding to the drama will be renewed speculation that Google may have another deal in the works with Akamai Technologies ( AKAM) reportedly in its sights. Akamai shares surged more than 17% at their peak in after-hours action but settled up less than 3% at $24 on volume of nearly 2 million, so the market appears to have already discounted the rumor.

Other quarterly reports of note on Thursday include Safeway ( SWY), Fairchild Semiconductor ( FCS), Fastenal ( FAST), and Winnebago Industries ( WGO) on the morning roster, and J.B. Hunt Transport Services ( JBHT) after the close.

As usual, Thursday brings weekly initial and continuing jobless claims at 8:30 a.m. ET with the consensus calling for initial claims to swell back up to 406,000 for the week ended Oct. 8 after the prior week's 401,000 reading. Continuing claims are seen stuck at 3.7 million.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, sees initial claims rising to 415,000, which would take away some of the optimism stoked by last week's low reading of 401,000.

Also at 8:30 a.m. will be the trade balance for August, which is expected to be a deficit of $45.5 billion, according to And later, at 2 p.m., comes the Treasury budget for September.

-- Written by Michael Baron in New York.

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

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