NEW YORK ( TheStreet) -- It seems silly to diverge from the obvious here: Wall Street wants to see solid progress from Europe on Wednesday or else stocks are going to be taking the elevator back down.

If that happens, October could give August a run for its money in the volatility department. And sure enough, the VIX climbed back above 30 on Tuesday, the level generally considered indicative of a significant amount of fear in the market. Since bottoming out in intraday action on Oct. 4, the Dow Jones Industrial Average has recovered 13%. The blue-chip index is up 7.3% overall for the month, and despite Tuesday's pullback, it's still up 1.1% for 2011.

In this case, the quick snapback is actually evidence against having any confidence that stocks have turned a corner. The bull argument is still easy to make right now, but it's all predicated on the emergence of a concrete solution for the Europe's sovereign debt problem. One that takes into account Greece, Italy, Spain, everyone. Not reports, not quotes and comments from officials, not yet another announcement of yet another sitdown.

Wednesday is the day that's been touted, the one that's given legs to this month's monster rally. If all the European Union summit yields is more obfuscation, or the German parliament doesn't deliver a clear mandate to Chancellor Angela Merkel for the country to support expansion of the region's bailout fund, it's going to get ugly all over again.

As of now, there's real reason to be nervous with so many questions yet to be resolved. According to the latest report from the The Wall Street Journal, banks are resisting taking the amount of losses on Greek bonds that Europe's leaders are pushing for and German legislators have put forth the idea that the European Central Bank should stop buying government bonds once the bailout fund is expanded.

In other words, everyone is still fighting to protect their individual interests as much as possible, and that's a recipe for disaster.

On the home front, it's still all about earnings this week. The fall of Amazon ( AMZN) after Tuesday's bell is disturbing as yet another one of the market's favorite momentum names is being laid low. You can bet Reed Hastings breathed a sigh of relief when Amazon's numbers crossed the wires. He and Netflix ( NFLX) are out of the barrel, for a day at least.

This is going to be a tough one for analysts to spin -- although the stock did catch a decent bounce off its after-hours low -- because the fourth-quarter outlook, which includes some expected impact of sales of the Kindle Fire tablet, includes plenty of downside to Wall Street expectations. They gave a $2 billion-plus window for sales. That doesn't speak of any confidence. The stock was trading at a gaudy forward price-to-earnings ratio of 71X before the lower forecast and after-hours ugliness, and investors will want to see some return on all this spending and expansion before jumping back in.

With so many reports due on Wednesday, it's difficult to settle on just one to highlight but Sprint Nextel ( S) gets the treatment this time around.

The stock has fallen more than 35% so far in 2011, and it's making a big gamble that ponying up for Apple's ( AAPL) iPhone, and investing in its own 4G LTE network is going to pay off in the long run.

Right now though, the bigger concern seems to be the company's ability to handle its considerable debt load of more than $18 billion. Moody's lowered its credit rating on Sprint earlier in the month, while Standard & Poor's has put the company on watch with negative implications. The average estimate of analysts polled by Thomson Reuters is for a loss of 22 cents a share in the September-ended period on revenue of $8.38 billion.

Sprint hasn't reported a quarterly profit in more than three years so the red ink is no surprise. JPMorgan, which has a neutral rating on the stock, previewed the quarter earlier on Tuesday, saying it's still too soon to pull the trigger and build a position, even in the likelihood that Sprint is executing better.

"We believe margins could be somewhat better than our 16.1% due to slower GAs gross additions/upgrades as well as better cost controls," the firm wrote. "Despite iPhone-driven operational improvements and likely alleviating the funding issue we believe Sprint's challenges are too large to be buying the stock currently."

JPMorgan doesn't expect the debt questions to be resolved tomorrow morning.

"Expect debt maturities to be addressed. Investors are wary of Sprint partly due to its plan to burn ~$2b in cash plus its $2.25b in maturities in 2012," the firm said. "We expect Sprint to address the funding issue after 3Q earnings mostly with vendor financing and unsecured debt. We do not believe that raising equity or secured debt is planned."

Evercore Partners noted last week that James Hance, Sprint's chairman, pledged at the company's Oct. 7 analyst day to expound on expectations for the iPhone's financial impact so expect that topic to also get plenty of play in what could be a contentious conference call.

The firm, which has an equal weight rating on Sprint shares with a $2.75 price target, said the company's interest costs could rise by as much as $140 million as it refinances roughly $4 billion in debt over the next two years.

The majority of Wall Street is still skeptical of Sprint with 24 of the 36 analysts covering the stock at either hold (21), underperform (1) or sell (1). At the current level of $2.70, the shares have seen a decent bounce off the Oct. 10 52-week low of $2.10 but are still below both the 50-day and 200-day moving averages of $3.03 and $4.36 respectively.

The other big names in the morning are Dow component Boeing ( BA) and Ford Motor ( F).

The a.m. roster also includes Allegheny Technologies ( ATI), AllianceBernstein Holdings ( AB), Automatic Data Processing ( ADP), Bemis Co. ( BMS), BE Aerospace ( BEAV), Brinker International ( EAT), ConocoPhillips ( COP), Corning ( DPS), Ford Motor ( F), General Dynamics Ford Motor ( GDS), Hanesbrands ( HBI), Hess ( HES), Hudson City Bancorp ( HCBK), JetBlue Airways ( JBLU), Jones Apparel ( JNY), Lockheed Martin ( LMT), MeadWestvaco ( MWV), Nasdaq Stock Market ( NDAQ), Northrop Grumman ( NOC), SAP AG ( SAP), Sealed Air ( SEE), Tupperware ( TUP), WellPoint ( WLP), and Wyndham Worldwide ( WYN).

Among the notables after the closing bell are A. Schulman ( SHLM), AFLAC ( AFL), Akamai Technologies ( AKAM), Ancestry.com ( ACOM), BMC Software ( BMC), GoldCorp ( GG), Morningstar ( MORN), Norfolk Southern ( NSC), Owens-Illinois ( OI), Skechers U.S.A. ( SKX), Teradyne ( TER), TriQuint Semiconductor ( TQNT), and Visa ( V).

Wednesday's economic calendar features the Mortgage Bankers Association's weekly applications survey at 7 a.m. ET, durable orders for September at 8:30 a.m., new home sales for September at 10 a.m., and crude inventories for the week ended Oct. 22 at 10:30 a.m.

The consensus is calling for a decline of 1.5% in durable orders, and new home sales of 300,000, according to estimates compiled by Briefing.com.

-- Written by Michael Baron in New York.

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

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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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