“The path of least resistance in the short-term is for a correction,” said Bruce McCain, chief investment strategist at Key Private Bank. “We have not yet decoupled from markets in Europe and Asia—If they sneeze, we won’t necessarily catch pneumonia, but the idea that we’ll avoid any signs of a cold is optimistic.”
McCain believes the market is still in the "middle of a correction" and may last more than usual near the bottom.
“As you get to the bottom of whatever the level is, unless we see significant deterioration in Europe or much worse outcomes from Asia, then it’s time to put more money to work,” he recommended. “There’s potential for a rebound in the emerging regions later on off the summer correction.”
On the economic front, U.S. consumer sentiment declined in early April, hurt by rising gasoline prices, according to a survey by University of Michigan and Reuters.
Geopolitical concerns also weighed, as Chinese growth slowedin the first quarter. But the tepid data led some to believe that Beijing could further ease monetary policy further to boost the economy.
In addition, Spanish banks had borrowed heavilyfrom the European Central bank in March, underlining the continuing difficulties peripheral institutions are having in securing funding.
Federal Reserve Chairman Ben Bernanke spoke at a conference in New York, defending the central bank's response to the financial crisis, but made no comments about the current state of the economy or the policies taken to spur growth.
Traders have been closely analyzing the Chairman's comments for signals about the possibility for further monetary easing on the heels of some tepid economic reports in recent weeks.
A slew of Fed officials spoke publicly throughout the week, expressing mixed views about maintaining low interest rates until 2014.
Google is in the spotlight as well after the search-engine giant's earnings beat forecasts and the company also announced a two-for-one stock split designed to preserve the control of its co-founders. At least 10 brokerages boosted their price target on the firm.
Apple has rejected the U.S. Justice Department's allegations that it colluded with publishers over electronic book pricing, calling the charges "simply not true," according to reports.
Coinstar surged after the company lifted its revenue outlook, thanks to stronger-than-expected demand at its Redbox kiosks.
Also on the economic front, consumer prices rose 0.3 percent in March, according to the Labor Department, in line with expectations.
—Follow JeeYeon Park on Twitter: @JeeYeonParkCNBC—
On Tap Next Week:
MONDAY: Retail sales, Empire state mfg survey, business inventories, housing market index, Eli Lilly shareholders mtg, Oracle vs. Google trial; Earnings from Citigroup, Mattel
TUESDAY: Housing starts, industrial, Citigroup shareholders mtg, tax day; Earnings from Coca-Cola, Goldman Sachs, J&J, IBM, Intel, Yahoo
WEDNESDAY: Weekly mortgage apps, oil inventories; Earnings from Abbott Labs, BlackRock, Bank of NY Mellon, Halliburton, Ebay, Qualcomm, Yum Brands
THURSDAY: Jobless claims, existing home sales, Philadelphia Fed survey, leading indicators; Earnings from BofA, DuPont, Morgan Stanley, Nokia, Travelers, Verizon, Microsoft, AMD, Capital One, SanDisk
FRIDAY: Earnings from GE, McDonald's, Schlumberger
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