"We've seen a little bit a profit taking, but don’t see the bears taking control just yet," Cook said. "It's way too early to say we’ve any change in trend."
Cook said he doesn't expect a bigger correction yet, because the economy continues to show signs of improvement and there's little indication the Fed plans to reverse course on its $600 billion in long-term bond purchases.
Still, he added, it would "scare me a lot to see stocks continue to rally" without more fundamental indicators of economic health, such as companies beginning to expand.
Financial stocks rebounded slightly after being in the red for most of the week following a handful of disappointing earnings from the likes of Goldman Sachs and Citigroup .
Morgan Stanley shares gained after the banking giant reported a profit which soared 60 percentthanks to strong retail brokerage fees offsetting poor trading results from its fixed-income division. Other brokerages have suffered as a result of sliding fixed-income trading profits.
Rivals JPMorgan and Barclays also advanced. Bank of America shares were higher ahead of the firm's earnings report due Friday before-the-bell. And Capital One Financial is expected to report earnings after-the-bell tonight.
Among the regionals, Huntington Bank declined even after the financial firm reported profit results that beat expectations. PNC Financial Services slipped after the bank reported a weaker-than-expected profit as customers remained reluctant to borrow, although lower loan losses helped it beat analysts' expectations.
Fifth Third Bancorp fell after news the bank would raise $1.7 billion in equity to repay its TARP funds, a move that would dilute the regional bank's stock. The firm however, reported better-than-expected quarterly profits.
The tech sector, however, slid, with nearly 80 percent of the stocks in the sector down for the session. Among the laggards was Google , down for a second day ahead of the search-engine giant's earnings reports after the closing bell tonight. Google was expected to report a 22 percent jump in revenue. Google surprises analysts to the upsidethree out of four times, however, according to research by Birinyi Associates.
In addition, chipmaker AMD was also slated to post earnings.
Ebay gained almost 5 percent after the online auction site topped earnings expectations and delivered a bullish 2011 profit outlook. In addition, at least eight brokerages raised their price targets on the firm.
Meanwhile, F5 Networks shares tanked almost 30 percent after the network equipment maker posted weaker-than-expected revenue. Seagate Technology also sank after the hard drive disk maker reported a 72 percent drop in profit due to sliding demand for its hard drives.
The price of oil, meanwhile, declined to nearly $88 a barrel after the government reported crude supplies rose by 2.6 million barrels the week before, far more than the 600,000 barrel decline expected by analysts.
The drop in oil prices, however, didn't trigger a larger sell-off among energy stocks and other commodities, which were already lower for the day, according to Schrader.
Overall, the energy sector slid, led by Valero Energy , Sunoco and Schlumberger . Schlumberger is scheduled to report earnings before the bell Friday.
Southwest Airlines gained after the airline reported strong quarterly profits as passenger sales offset rising fuel costs.
Consumer stocks, however, fared well on Wednesday, with both consumer staples and discretionary names on the rise. Sears , JCPenney and Lowe's were among leaders in the discretionary sector, while among consumer staples companies, General Mills , TysonFoods and CVS Caremark led.
And shares of Wendy's/Arby's Group soared almost 10 percent after news the fast-food retailer was exploring strategic alternativesfor its Arby's restaurant chain.
Treasury prices added to earlier losses, after the Treasury Department's poorly received auction of $13 billion in 10-year Treasury Inflation Protected Securities (TIPS) at a yield of 1.17 percent and a bid-to-cover ratio of 2.37.
In economic news, jobless claims dropped by 37,000 to 404,000 for the week ended Jan. 15, the biggest drop since February, according to the Labor Department. Economists at Reuters had expected claims to fall to 420,000 from 445,000 the week before. The less volatile four-week moving average of new claims dropped 4,000 to 411,750.
Existing home sales jumped 12.3 percentin December to an annual rate of 5.28 million units, up from 4.7 million in November, an unexpectedly positive sign for the housing market. Economists surveyed by Reuters had expected sales to rise to 4.85 million.
Meanwhile, the Philadelphia Fed Index dropped to 19.3 in January from 20.8 in December, while the prices paid indicator within the index jumped to 54.3 in January, the highest level since July 2008. The prices paid index was at 47.9 in December.
And the Conference Board's index of leading economic indicators gained 1 percent in December after a 1.1 percent rise in November, and more than expected.
Europe's sovereign woes were in the spotlight again after The Wall Street Journal reported that Spain plans to inject billions of euros into its troubled savings banks.European stocks closed lower, weighed by fears of China tightening.
Traders also digested news that Chinese economy was stronger-than-expected,meaning China could tighten monetary policy further. That possibility dragged down Asian stocks.
On the Calendar This Week:
THURSDAY: Earnings after-the-bell from Google, Advanced Micro, Capital One.
FRIDAY: Dodd-Frank rulemaking deadline; earnings before-the-bell from Bank of America, GE, BB&T, Schlumberger and Sun Trust.
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