Renewed optimism about Europe's ability to get a grip on its financial situation pushed stocks higher on Monday. And short of an outright ugly consumer confidence reading from the Conference Board that comes out after the market opens, we may actually get another positive day in the market.

So what's behind this new bout of optimism about Europe? After all, we have had many Europe-inspired rallies in the past that were based on little more than temporary fixes and band-aid solutions. Is it any different this time around?

The newest European plan may in the end come to nothing, but it does have a number of useful components that have to form part of a viable solution. This unofficial plan calls for increasing the size of the Euro-zone rescue fund, known as the European Financial Stability Facility or EFSF, from the current level of €440 billion to perhaps €2 trillion to €3 trillion.

The idea is that increasing the size and scope of this fund will give the European authorities enough firepower to not only ring-fence the vulnerable countries, but also recapitalize the banking system. In a way, this fund will be analogous to the TARP fund that helped stabilize the U.S. financial system.

None of this is official yet, and a lot of institutional and logistical details need to be spelled out. Given the need for legislative approvals in individual member countries, the final adoption of such a plan will be time-consuming and messy. But notwithstanding such uncertainties, the articulation of such a plan will go some way in addressing some of the existential questions surrounding the currency union. Needless to say that taking such unsettling questions off the table will be a very desirable outcome.

In corporate news, Walgreens ( WAG - Analyst Report ) came out with better-than-expected results on the back of solid comp sales momentum. Goldman Sachs ( GS - Analyst Report ) is reportedly contemplating significant cost-cutting measures, including major lay-offs. We have earnings reports from Jabil Circuit ( JBL - Analyst Report ) and Paychex ( PAYX - Snapshot Report ) after the close today.

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