NEW YORK ( TheStreet) -- 2011 is starting to look like it will go down as the year without a Santa Claus rally.

The follow-through from the initial euphoria following Europe's big summit has been awful, putting the Dow Jones Industrial Average down 3% already this week. The blue-chip index is now up just 2.1% for 2011, and thanks to Wednesday's slump, the S&P 500 is back in negative territory for the year on both a total return (off .57%) and price (down 2.5%) basis.

The pessimism is palpable. The VIX is bumping back up, and the yield on the 10-year Treasury has dipped below 2% again. The strength in the greenback is hammering commodities, especially gold, and the possibility that the eurozone won't hold together suddenly seems very real.

Earlier this week, the Bank of America/Merrill Lynch survey of fund managers for December was released, and the results underlined how uncertain the so-called smart money is right now.

"Nearly a quarter of the panel of 190 institutional investors (24 percent), expect one of the 17 member states to leave the euro in the first half of 2012," BofA/Merrill Lynch noted. "In total, 45 percent expect a member to depart in the foreseeable future, with 7 percent undecided."

A few more underwhelming bond auctions for member countries, maybe a sovereign debt downgrade or three, and there's a real risk of panic setting in across the pond.

Sam Stovall, chief equity strategist at S&P Capital IQ, was a bit more circumspect than that in commentary on Wednesday however.

" With the euro falling below the $1.30 level, many now question the likelihood of an end-of-year rally," he said. "In our opinion, while the outlook remains positive in the long term, there may be more attractive entry points in the near- and intermediate-term."

As diplomatic as "more attractive entry points" is, the translation is that stocks likely have more downside ahead.

Thursday brings a goodly amount of U.S. economic data, including weekly initial and continuing jobless claims at 8:30 a.m. ET; the producers price index for November at 8:30 a.m. ET, the Empire State manufacturing survey for December at 8:30 a.m. ET; industrial production and capacity utilization for November at 9:15 a.m. ET; and the Philadelphia Fed survey at 10 a.m. ET.

Ian Shepherdson, chief U.S. economist, at High Frequency Economics, is advising investors to brace for some soft data, saying specifically that jobless claims could rebound back above 400,000 vs. the consensus view of 390,000. Consider yourself warned.

On the earnings front, Research In Motion ( RIMM) is one of the big quarterly reports on Thursday, and the expectations couldn't be lower following the company's recent pre-announcement. The commentary ahead of the report is along the lines of how poor the guidance will be, not whether or not the company will even try to hold the line.

"For its outlook, expectations are that the company will guide materially below its previous range of $5.25-$6.00 in EPS for FY12 with consensus estimates already at $4.45 in EPS (down from $4.80 in EPS prior to its miss)," said Sterne Agee, which has a neutral rating on the stock. "While we believe this is a reasonable near-term view, our longer-term concern is whether consensus forward estimates need to be reduced further as competitive pressures continue to mount and the company faces a major product transition with BlackBerry 10 (formerly known as BBX) in CY12."

The only thing keeping the firm from a downgrade is the chance that a white knight might swoop in and save the day.

"Despite our cautious view, the reason why we are not rating shares Underperform at this time is because we believe there is some intrinsic value in RIMM as an acquisition target with its 70 million subscribers, push network, BlackBerry OS, and patent portfolio," Sterne Agee said. "We estimate that its 5000 patents assets alone could be worth between $2.5-4 billion, assuming the prices that an AAPL-led team paid (which RIMM was part of) for Nortel assets and GOOG for MMI (Motorola Mobility)."

Research In Motion shares closed Wednesday at $15.08, down more than 70% for the year. The stock hit a low of $14.80 during the session, its lowest point in more than eight years, and virtually no one on Wall Street is expecting the situation to get better before it gets worse. Should be a fun conference call after the close.

Meantime, the market could get a lift from FedEx ( FDX), which reports its fiscal second-quarter results before the opening bell. The average estimate of analysts polled by Thomson Reuters is for a profit of $1.52 a share in the November-ended period on revenue of $10.61 billion.

The stock is down nearly 11% so far in 2011 as of Wednesday's close at $77.29, but 20 of the 27 analysts covering the shares are bullish at either strong buy (9) or buy (11). Jefferies is a believer with a buy rating and a 12-month price target of $110, and the firm lifted its earnings estimate to $1.51 a share (still a penny below consensus) from $1.47 a share on Tuesday. The volumes outlook will be key, Jefferies said.

"Many investors will look to FDX's volumes as a gauge of the health of the overall economy," the firm said. "We expect strength in the quarter to be driven by Ground volumes and overall U.S. pricing, partly offset by International Priority volumes down YoY - but 'better than feared.' We'd also anticipate hearing about signs of stabilization in International margins, as we believe FDX has been repositioning capacity to meet generally lower YoY demand."

Jefferies said it sees "modest downside risk" to FedEx's outlook for earnings of $6.25 to $6.75 a share for fiscal 2012.

The other notable reports on Thursday are Adobe Systems ( ADBE), Hovnanian Enterprises ( HOV), Pier 1 Imports ( PIR), Rite Aid ( RAD), Scholastic ( SCHL), and Winnebago Industries ( WGO).

Wednesday's after-hours action was dominated by reactions to Lam Research's ( LRCX) bold $3.3 billion stock deal for Novellus Systems ( NVLS), which also sparked buying in names like KLA-Tencor ( KLAC) and Teradyne ( TER).

The big loser on Thursday though will be BioSante Pharmaceuticals ( BPAX), which saw its shares plummet more than 70% after disappointing late-stage clinical results for LibiGel.

-- Written by Michael Baron in New York.

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