NEW YORK ( TheStreet) -- Problem solved.

If it didn't look like smooth sailing for the rest of the year before, it sure does now. The Dow Jones Industrial Average is back above 12,000, on pace to finish with its largest ever monthly point increase; fears of a double-dip recession have evaporated; and corporate earnings are holding up pretty well with the S&P 500 on track to deliver 16% earnings growth for the third quarter, according to Thomson Reuters.

Of course, it's dangerous to get confident, but Thursday's hard details on a plan for Europe, complete with big numbers like 50% haircuts on Greek bonds and ramping up the region's bailout fund well north of $1 trillion, were what Wall Street has been waiting for/rallying on since early October.

So the blast of euphoria when the agreement finally arrived is perfectly understandable. Suddenly the Dow is sitting up more than 5% for the year -- indeed all three major U.S. equity indices are back in the green -- and we're on the cusp of November with visions of window-dressing dancing in our heads.

There's plenty of commentary out there punching holes in the EU's deal, and valid concerns abound (will the individual banks accept these losses on Greek bonds, where is all the new capital being called for going to come from, etc.) but this is a start to a chance at a solution and it will have to do for now.

Policy makers only have ideas to put to work, no magic wands to wave. Yes, this plan calls for solving a debt crisis with more debt (if you boil it all down), but this is really about instilling confidence while other changes (austerity measures etc.) are made to try to get the balance sheet in order. And if the balance sheet starts to look better, then maybe corporations get more confident, and the engine of industry starts revving up again. That's the hope anyway.

For now, U.S. stocks are probably in for some profit-taking in the next few weeks, and the headlines from Europe still bear watching. Moving back from the abyss isn't the same as getting back on solid ground.

Friday brings to a close a peak earnings week where nearly 200 S&P 500 companies will have opened their books when all is said and done.

Two Dow components report before the opening bell, Chevron ( CVX) and Merck ( MRK).

Like Exxon Mobil ( XOM), Chevron has been a standout performer over the past year with shares up more than 25%. The stock reached a new 52-week high of $109.98 during Thursday's regular session, a level that represents a bounce of roughly 27% from an intraday low of $86.68 scraped when the broad market bottomed out on Oct. 4.

The average estimate of analysts polled by Thomson Reuters is calling for earnings of $3.46 a share from Chevron in the September-ended quarter on revenue of $67.93 billion. The majority of the sell side is bullish ahead of the report with 19 of the 23 analysts covering the stock at either strong buy (9) or buy (10), and the median 12-month price target sitting at $120.

Expect few surprises as Chevron already gave an update on the quarter on Oct. 11, and announced plans for a 3.8% increase in its quarterly dividend on earlier this week.

Meanwhile, Merck has seen its stock fall 8% over the past year as the drug giant struggles to grow the top line and continues to cut jobs in the wake of its merger with Schering-Plough in late 2009.

For its fiscal third quarter ended in September, the consensus estimate is for earnings of 91 cents a share on revenue of $11.61 billion. That's down from a profit of 95 cents a share in the June quarter on revenue of $12.15 billion, and up from year-ago earnings of 85 cents a share on revenue of $11.12 billion.

Last time around, Merck's 95-cent profit was in line with the average analysts' estimate but the stock fell in the wake of the report as the company signaled a need to step its cost-reduction efforts and make aggressive efforts to reduce staff. The stock closed at $34.93 on July 28, then fell in five straight sessions following the July 29 report, eventually reaching its 52-week low of $29.47 on Aug. 9.

It's bounced back up since then, of course, closing Thursday safely above $34 again, but the valuation, a forward price-to-earnings ratio of around 9X based on the fiscal 2012 consensus view of $3.83 a share, shows Wall Street still isn't all that impressed. The 4.6% forward annual dividend yield is a plus, of course, and the sell side still has a bullish lean with 16 of the 22 analysts covering the stock at strong buy (7) or buy (9).

The other notables on Friday include American Axle & Manufacturing ( AXL), Arch Coal ( ACI), Arkansas Best ( ABFS), Biogen Idec ( BIIB), Cablevision Systems Corp. ( CVC), Calpine ( CPN), Constellation Energy ( CEG), Coventry Health Care ( CVH), Dominion Resources ( D), Goodyear Tire ( GT), Interpublic Group ( IPG), Lear Corp. ( LEA), Newell Rubbermaid ( NWL), Newmont Mining ( NEM), Oppenheimer Holdings ( OPY), Pilgrim's Pride ( PPC), Rockwell Collins ( COL), Stillwater Mining ( SWC), Tenneco ( TEN), Weyerhaueser ( WY), and Whirlpool ( WHR).

The economic calendar brings data on personal incomes and spending in September, and the employment cost index for the third quarter at 8:30 a.m. ET, as well as the final University of Michigan consumer sentiment reading at 10 a.m.

Briefing.com expects spending to see a 1.2% bump vs. the consensus view of 0.6%, while its forecast is for a 0.2% decline in incomes, which is at odds with a consensus view for a 0.3% increase.

And finally, two momentum stocks, Coinstar ( CSTR) and Baidu ( BIDU) will be heading in opposite directions tomorrow.

Coinstar's status has dimmed as 2011 wore on and the stock was getting crushed late Thursday on the company's plans to boost the cost of renting a standard movie DVD from one its Redbox kiosks by 20% to $1.20 from $1 per night. This doesn't feel like a Netflix-esque misstep from here. Most folks likely swipe credit or debit cards at these machines, and the extra 20 cents shouldn't scare them too much.

As for Baidu, the company's third-quarter revenue was up more than 80% from last year, and it sees continued growth on the top line in the fourth quarter. Having pulled back more than 15% from its July 26 52-week high of $165.96, the stock was making up some lost ground in after-hours action, rising more than 7% to $148.75 at last check. Looks like a banner day for Baidu is in the making.

-- 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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