Another stock slide may be just getting started

The two-week old reprieve from the selling earlier this month was shattered on Tuesday when Microsoft (MSFT) fell 9.3 percent after the software giant reported disappointing forward guidance and suffered a bevy of analyst downgrades as a result.

That dragged down the entire tech sector and hit the Dow Jones industrial average hard for a loss of 291 points, or 1.7 percent. The S&P 500 dropped 1.3 percent, the Nasdaq slid 1.9 percent and the Russell 2000 lost 0.5 percent.

Even though the winter storm in New York was much less severe than expected and stocks finished off their Tuesday lows, the overall impression is that another downward slide is just getting started.

The list of concerns is growing after a weaker-than-expected U.S. durable goods report suggested that the slowdowns in Europe and Asia are finally having an effect here at home. Orders dropped 3.4 percent in December for the fourth consecutive contraction and the worst reading since August.

That sets the stage for disappointment if the Federal Reserve sticks with its mid-2015 rate hike timing as is widely expected at its policy announcement Wednesday.

Other hurdles for Wall Street include the simmering tension in the eurozone as the new anti-bailout/anti-austerity Syriza-led government in Athens prepares for its standoff with the "troika" of the European Union, the European Central Bank and the International Monetary Fund.

Greek stocks lost 3.5 percent as investors worried about the wide gap between Syriza's campaign promises and the limited flexibility on bailout terms the Troika officials have offered so far.

A showdown is coming. And it could result in a Greek exit from the euro, which would immediately shift focus to anti-austerity parties that are on the rise in Spain, Italy and France.

There's more, from increased fighting in Ukraine to the worst decline in Chinese industrial profits since 2011 to signs that Japan is realizing the limits of its aggressive money-printing stimulus as it worries about the negative impacts of a severely weakened yen. And finally, the shine has been taken off of last week's enthusiasm about the ECB finally unveiling its sovereign bond-buying program.

Back to earnings. Microsoft (which suffered a gapped move lower today, as shown above) wasn't the only source of disappointment. Blue-chip titans Caterpillar (CAT) and Procter & Gamble (PG) dropped 7.2 percent and 3.5 percent, respectiveley, on earnings. Microsoft blamed a slowdown in PC demand, Caterpillar cited weak overseas demand and the impact of collapsing energy prices, and P&G fingered currency drag from a strong dollar on repatriated foreign profits.

As a result of these forces, FactSet reports that analysts are now looking for first-quarter S&P 500 earnings per share growth of just 0.1 percent, down from 4 percent at the start of the quarter, while revenues are expected to drop 1.9 percent vs. growth of 1.6 percent they were expecting just a few weeks ago.

Technically, Tuesday's sell-off was accelerated by a drop in popular currency carry trades. This where hedge funds borrow, or sell short, a weakening currency to fund speculations in a rising currency. The most popular carry trade in recent years has been the dollar-yen, which benefits stocks when the dollar rises against a weakening yen. But recent turmoil in Europe has undermined the trade, which broke down out of a three-week uptrend today.

That's because the euro strengthened today, which weighed on the dollar. Doubleline Capital's Jeffrey Gundlach believes this could be a consequence of rising expectations that Greece could leave the euro -- which could, in a contrarian take on the situation, leave the currency union stronger because its weakest fiscal link would be removed.

If so, than the political standoff between Athens and the rest of Europe could end up strengthening the euro but weighing on stocks as currency carry trades are hit. No one said understanding why Wall Street does what it does is straightforward.

We could see a short-lived rebound on Wednesday, thanks to the record-breaking results Apple (AAPL) announced after Tuesday's close on strong iPhone sales, especially in China. But deterioration in medium-term measures of breadth, or the share of the market moving higher, suggests that any bounce should be sold into, not bought into.