Thursday is the biggest earnings day of the quarter, with roughly 10 percent (56 companies) in the S&P 500 reporting. So far, we have almost over 45 percent of the Index reporting results.
As it stands, earnings growth is at 7.3 percent—the best showing since the 7.7 percent rise in the fourth quarter (Q4) of 2012, with 65 percent beating expectations (about average), according to S&P Capital IQ. Collectively, revenue is up 3.5 percent.
Futures rallied as Q4 GDP came in up 3.2 percent, with the price index up 1.1 percent as expected, still well below the Federal Reserve's target. However, most traders are very focused on the January numbers; unfortunately PMI/ISM won't hit until next week.
The emerging market crisis is, in a way, a big help to the Fed. The crisis has thrown a lot of money back into the United States, much of it into bonds. The 10-year yield has gone from roughly 3.0 percent in the beginning of January to 2.70 today.
Japanese markets dropped 2.7 percent and are now at a 3-month low, even though the yen weakened. Europe is mixed, but Germany employment fell more than expected in January.
1) What happens when January is a down month?
With the S&P 500 down about 4 percent, that is now a very real possibility, even a likely possibility. We all know about the January indicator—as goes January, so goes the year. Still, that doesn't work as well when January is a down month, Dan Greenhaus from BTIG notes. There have been 21 Januaries since 1960 in which stocks traded lower; in 12 of those 21 months, stocks were higher in the subsequent 11 months, including 4 of the last 5 instances.
2) Initial Public Offerings at Nasdaq included: a) Dicerna Pharmaceuticals (DRNA) priced six million shares at $15, above upwardly revised range, b) biotech Celladon Corporation (CLDN) priced 5.5 million shares (more than expected) at $8, in line with price talk that was revised down.
—By CNBC's Bob Pisani