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Developments in Europe remain the market's primary focus, offsetting the by and large reassuring earnings reports this morning. European leaders were initially expected to come out with a comprehensive plan in their weekend summit meeting, but those expectations have since come down. The expectation now is that 'something' will come out of this meeting, while the remaining issues will get finalized in a subsequent meeting on Wednesday next week.

The European uncertainty ensures that the market will be unable to breakout of its two-month old trading range despite the reassuring earnings season thus far. This morning's reports from General Electric (GE - Analyst Report), Honeywell (HON - Analyst Report) and McDonald's (MCD - Analyst Report) were particularly favorable.

General Electric met earnings expectations on better than expected revenue. The conglomerate reassuringly guided towards double-digit earnings growth next year despite the 'volatile economy.' Honeywell handily beat earnings and revenue expectations and raised guidance. Among other earnings reports from industrial players, Dover Corp. (DOV - Analyst Report) also came ahead of expectations.

Verizon (VZ - Analyst Report) beat on EPS, but came short on the revenue side, as the carrier added fewer than expected post-paid subscribers during the quarter. McDonald's came out with a solid EPS and revenue beat on the back of better than expected same-store sales growth. Schlumberger (SLB - Analyst Report), the oilfield services giant, missed expectations as weakness in the Middle East offset North American strength.

Microsoft (MSFT - Analyst Report) reported in-line earnings on modestly better-than-expected revenue beat after the close on Thursday. Chipotle Mexican Grill (CMG - Analyst Report) was able to offset the rise in input costs through increased traffic and price increases, helping it come ahead of earnings and revenue expectations.

The earnings reports in this reporting cycle thus far have been good; they are not spectacular, but reassuringly good enough relative to some of the more exaggerated pre-season fears. The market will make solid gains in the coming days If only the Europeans can get their act together.

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