US Markets

US stocks starting off 2014 in correction mode?

Traders work on the floor of the New York Stock Exchange.
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With the U.S. stock market off to a rough start—which seems especially so given Wall Street's gangbuster year in 2013—a case could be made that the much-discussed correction is at hand, with equities down nearly 2 percent so far this year.

The market's climb, which had the Dow and S&P 500 hitting all-time highs in 2013, started to "feed into a bit of complacency that stocks can only go up, and we're here to tell you, that's not true," said Jim Russell, senior equity strategist at U.S. Bank Wealth Management.

"The correction-less market is now into a 28th month. The longer you go, that risk starts to build. It's normal and healthy for the markets to have a correction, so that is something that is present in everyone's mind," said Darrell Cronk, regional chief investment officer of Wells Fargo Private Bank, referring to the last time Wall Street fell more than 10 percent, which occurred in late 2011.

The market is long overdue, given "we usually have a 10 percent correction every 18 months or so, even in a raging bull market," said Doug Foreman, chief investment officer at Kayne Anderson Rudnick Investment Management.

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"Portfolio hedgers are clearly having a rethink about the odds of a correction as the market finds fewer fundamental reasons to look above recent all-time highs," Andrew Wilkinson, chief market analyst at Interactive Brokers, wrote Monday, which proved the worst session in more than three months for the Dow Jones industrial average which lost 179.11 points, or 1.1 percent, to end at 16,257.94, down 1.9 percent for 2014.

Monday's drop left the down 1.6 percent for the year so far, while the Nasdaq is off 1.5 percent so far in 2014.

Corrections are a normal feature of the stock market, "yet we never know what will trigger one," said Kate Warne, an investment strategist at Edward Jones. "It's not like the subway trains, where one has to come," she added.

"People who try to time corrections usually don't do very well," offered Peter Sidoti, chairman of Sidoti & Co.

"It's been 830 days without a 10 percent correction; I think a correction would be very healthy and I'd be happy to see it," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management. That said, a correction is "not a reason to sell good investments, but don't be surprised if we have one," he added.

Yet as much as most market strategists say they would welcome a correction, they also generally agree that a catalyst is needed to begin an extended drop. Friday's nonfarm payrolls report for December, dismal as it was, seemingly did not fit the bill, as stocks barely registered disappointment as many dismissed it as too far off the mark to take without further confirmation.

Apart from some major event, a rise in interest rates "in an accelerated manner" rather than a controlled climb could spark a correction, said Tim Speiss, a vice president at EisnerAmper Wealth Planning, who added that he was not forecasting such a scenario.

"People have been talking about a correction since the start of last year, when things were supposedly going 'too far, too fast.' At this point, everybody is just waiting for earnings," which some feel need to justify 2013's advance, said Dan Greenhaus, chief market strategist at BTIG.

Robert Pavlik, chief market strategist at Banyan Partners, said those clamoring for an extended decline in equities are likely looking for a way into the market at a reduced price, "When people want a correction, that's a sign they are not fully vested."

—By CNBC's Kate Gibson.