There are two issues dominating the markets: 1) When will the slide in momentum stocks stabilize, and; 2) when will bond yields bottom?
There's still no stability in momentum stocks. I noted on Thursday that one of the factors helping the market rally was stability in momentum stocks. That changed about 1 PM, when small cap stocks began to slide. The , which was up 1 percent at one point in the morning, ended down 1 percent, and is near the lows for the year.
Major sectors this week have suffered as well:
Biotech ETF down 5.6 percent
NASDAQ Internet down 5.4 percent
Russell 2000 down 2.8 percent
This is mostly a small cap correction: the S&P 500 is down a far more modest 0.3 percent for the week.
As for bond yields, we are seeing record low 10-year yields in the debt of Italy, Ireland and Spain. Italy was as low as 2.88 percent this quarter, down from 4.2 percent in the beginning of the year. Spain was at 2.85 percent, down from 4.2 percent in the beginning of the year.
Why bring up European yields? Because everyone believes that they are one of the main reasons U.S. yields remain low. Even a poor 30 year auction yesterday couldn't bring down bond prices.
Earnings
1. Home builder William Lyon Homes is trading at a two-month high after reporting stronger-than-expected earnings and sales. The builder saw increased orders even as selling prices jumped: first quarter orders rose 11 percent, while average sales price surged 78 percent.
It's been a rough week for builders after DoubleLine's Jeffrey Gundlach recommended shorting SPDR S&P Homebuilders ETF at the Ira Down Investment Conference as he believes declining affordability will reduce housing demand. The fund is down 3.4 percent this week.
2. Speaking of building...How bad was the weather this winter? Ask Beacon Roofing really got slammed, reporting a loss of 25 cents versus estimates of a 6 cent loss. Revenue at $384 million were also way below estimates of $416.8 million. "Multiple winter storms that brought record snowfall and freezing rain delayed both residential and commercial roofing projects across our core markets," CEO Paul Isabella said.
3) Hilton reported a nice beat on earnings, and increased revenue per available room (RevPAR), earnings per share (EPS) and adjusted earnings before interest, taxes, depreciation and amortization. Full year 2014 EPS was raised to 64-67 cents, up from the current 57-61 cent range (consensus was 60 cents).
4) India stocks closed at a new high, up over two percent. The last round of voting on the national election takes place on Monday...the results will be announced May 16th.
--By CNBC's Bob Pisani