Market Preview: Not Too Bad

NEW YORK (TheStreet) -- It could have been worse.

That's pretty much the takeaway from the drubbing the major U.S. equity indices took on Wednesday. The seeds for a serious swoon were certainly present with the realization that QE3 is far from a done deal finally sinking in, and Spain picking up some of Greece's slack in eurozone worry department.

Sure, the S&P 500 surrendered 1400 but the selling overall was pretty standard. Not a tremendous amount of volume, and respectable bounce off the lows late in the day. The VIX bears watching, rising 5% to 16.44, but all in all, not much evidence of panic.

Birinyi Associates noted earlier in the week that 2011's losers have been 2012's biggest winners, and some of those names took correspondingly big hits on Wednesday. The firm used nine criteria -- such as trailing price-to-earnings multiples and price-to-book ratios -- to evaluate how various investment strategies have performed so far, sorting the components of the S&P 500 according to each one.

"During the first three months of 2012 the worst strategy was to own the 50 stocks with the highest dividend yield at the start of 2012," the firm said on Tuesday. "That group of fifty, on average, returned just 3.20%. The best performing strategy was to buy the fifty stocks that performed the worst in 2011. Those fifty names have gained 22.84% so far in 2012."

Wednesday saw 2012's top two percentage gainers take sizable haircuts: Bank of America(BAC) was down 3%, making it the biggest loser in the Dow; and Sears Holdings(SHLD) , which had more than doubled this year, lost 7.4%.

Taking profits doesn't explain all of Wednesday's weakness but it's certainly an element, and judging by how much deeper the selling was in Europe, the United State still has some safe-haven appeal.

As for Thursday's scheduled news, many of the retailers will be releasing monthly same-store sales numbers. The expectation is for a pretty strong month with Thomson Reuters forecasting an overall year-over-year gain of 3.4% with only the drug stores showing any real weakness. The firm says the Easter holiday landing on April 8 and March's warm weather should be drivers.

"Demand for the latest fashion trends is always strong in the weeks leading up to Easter, a time when retailers are still selling the season's must-have items at full price," wrote analyst Jharonne Martis-Olivo on Tuesday.