Stocks and other risk assets were mostly lower on Thursday as investors digested a slew of earnings and economic data. As earnings continue to be released in droves, it is paramount that we not only pay attention to the actual numbers but how the stocks (and major averages) react to the numbers.  This allows us to see how the market participants are “voting” and helps us filter out the noise and focus on what matters most: price action. The Dow Jones Industrial Average and S&P 500 broke below their respective 50 DMA lines on Thursday which is not ideal for the bulls.

Spanish Debt Auction Solid But Yields Rise, Brazil’s Central Ban Cuts Rates, & A Slew of Earnings Released:

Stocks fell on Thursday as investors digested a slew of economic and earnings data. Demand for Spain’s much anticipated auction was solid but yields were mixed. Spain sold 2.5 billion euro ($3.3 billion) of 2-and 10-year sovereign bonds but yields rose on the 10-year debt to 5.743%, and fell on the 2-year debt to 3.463%. In other news, Brazil’s central bank cut interest rates by 75 basis points to 9% and left the door open for more rate cuts in an attempt to stimulate their economy. A slew of high profile companies released Q1 earnings and most topped estimates. However, news from the economic front was not impressive. Weekly jobless claims rose for the second straight week and missed the Street’s estimate. Existing home sales fell -2.6% for March and missed the Street’s estimate. The Philly Fed Index came in at 8.5 in April which was lower than March’s 12.5 reading and the 10.3 estimate. Meanwhile, the Conference Board’s Index of Leading Indicators rose +0.3% which topped the average estimate for a gain of +0.2%.

Market Outlook- In A Correction