Earnings: A large number of misses this morning. Among industrials and materials, big misses from Cummins, Pitney Bowes, U.S. Steel, and Martin Marietta Materials. Pfizer also missed, though just by a penny, but lowered its full-year outlook.
Engine maker Cummins was a mess, a big miss on bottom line ($1.44 a share vs. $1.86 a share expected) and slightly light on top line ($3.922 billion vs. $3.966 billion). Once again, there was notable weakness in Europe, but also Brazil and China. First-quarter North America revenue was down 15 percent, international down 10 percent. Engine revenue was down 19 percent.
That said, as with many industrials, it maintained its full-year guidance. Huh? It misses by 40 cents a share and still maintains guidance? Management is insisting that first-quarter is the bottom: "While uncertainty remains in a number of markets, we expect that the first quarter will mark the low point of the year for company revenues."
(Read More: Earnings Preview—Dreamworks & IAC)
Once again, here is another company expecting a notable pickup in demand in the second half of the year.
Building products maker Martin Marietta missed, but cited the unusually cold weather this spring versus the unusually warm weather last year in the same period, but it too remain bullish on housing: "From a macroeconomic view, we see positive indicators, including upward trends in housing starts, construction employment, and highway obligations."
1) Pitney Bowes bucked the trend and CUT its dividend in half, to 18.75 cents from 37.50 cents a quarter, saying "this action will provide the company the added financial flexibility to invest in its business and enhance its capital structure, while continuing to provide a very competitive return to its shareholders."
Admittedly, the 9.26 percent dividend yield was the second highest in the S&P 500, so it's not surprising it was cut. The company, which specializes in mailing machines, is under pressure from government austerity.
2) Will the Fed do more? Rather than tapering off its $85 billion in purchases each month, lots of talk over the weekend that the Fed might INCREASE its buying of mortgages and Treasurys, or get even more creative, as the Japanese are doing buying real estate investment trusts and exchange-traded funds.
(Read More: Wall Street Sees No End to QE Until at Least 2014)
Most think that is unlikely, because the Fed believes they have already had an impact, particularly on housing and the stock market.
The overall economy, four years after stimulus began, is certainly a disappointment. Perhaps it's unfair to ask stimulus to perform a role that fiscal policy could more easily address, but that's not stopping traders from asking about the limits of Fed policy.
How much more traction would the Fed get if it bought more? When you reach ground zero, and you're not getting much more traction from your current program, what's the answer? Is it possible quantitative easing is not the answer?
If the Fed does keep going, does it get more creative? What to buy? Does it buy unsold houses? Does it buy shirts and menswear? Does it buy yogurt from Whole Foods?
"Oscar Meyer, get ready ... they're coming after your corn beef," on trader quipped this morning.
2) Euro zone inflation has dropped to 1.2 percent in April, a three-year low, and that will provide plenty of cover for the European Central Bank, which is meeting this week. There's plenty of talk that the ECB might get more creative, for example in expanding the pool of collateral it accepts, or launching another lending support program. European debt yields keep dropping: Italian 10-year yields, at 3.94 percent, are near the lowest levels in 2.5 years.
(Read More: Italian Bond Yields Could Be Poised on Precipice)
—By CNBC's Bob Pisani