Apple's earnings miss could undermine wobbly market

 Stocks fell sharply after the headlines on Greece, but stocks finished off their lows after a Wall Street Journal story that said the Fed is moving closer to some sort of stimulus and could consider action next week or at its meeting next month. While containing no new ideas, the article helped lift stocks as traders speculated the reporter got the story from top Fed officials. The Dow finished down 104 points to 12,617. The S&P 500 was off 12 at 1338, just above an area of support, and the Nasdaq fell 27 to 2862.

 “It’s certainly going to offset the Fed,” said Ablin of the Apple news. “They’ve got their party hats and their pom poms on, and I think the Apple announcement is going to take the air out of their balloon.”

 Miller Tabak strategist Peter Boockvar said investors should beware of market expectations about the Fed, which he says have been supporting stock prices. “At the end of the day, if earnings are going to drive where stocks go, and earnings growth is slowing dramatically, it’s irrespective of what the Fed is going to try to do to keep asset prices higher,” he said on “Closing Bell.”

 Greenhaus said he remains cautious on stocks and expects a difficult summer. “Given the level of uncertainty with earnings, and the concern about Greece — they need another bailout. And you have Moody’s putting a couple of triple A countries on negative watch, we’re not enthusiastic about investing. I think you’re in a dangerous moment here for investors,” said Greenhaus.

 Besides earnings, Apple fallout and Europe, there is just one economic report Wednesday. New home sales are reported at 10 a.m.

 “Housing is one bright spot in the economy,” said Mark Zandi, chief economist at Moody’s Economy.com. “It’s improving. It’s steadily improving in sales, construction and now in house prices. Housing’s gone from being a hurricane in the economy to a tailwind. We need all the help we can get.” As long as the job situation does not deteriorate further, Zandi said the lower rates should help boost home purchases, as rising rents are making buying more attractive.

 There is also a 1 p.m. auction of 5-year notes Wednesday, and the House Financial Services Committee will hear testimony from Treasury Secretary Timothy Geithner. Geithner is appearing to discuss banking regulation but will certainly be asked about what he knew about Libor and the rigging scandal.

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