The Standard & Poor's 500 index stands within 1 percent of its record high, and Adam Parker, chief U.S. equity strategist for Morgan Stanley, thinks earnings are strong enough to prevent a major decline.

"I don't think the S&P ever goes down by 10 percent or more unless people really get afraid of an earnings recession," he tells CNBC. "So I think you have to think about what could introduce volatility into the earnings estimates. That's the issue."

With more than 90 percent of companies in the S&P 500 having reported first-quarter earnings, profits increased 2.1 percent from a year earlier, compared with an 8.5 percent advance in the fourth quarter, according to FactSet.

Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!

But while analysts currently predict a profit increase of 6 percent in the second quarter, 72 percent of companies that have issued guidance said their earnings for the quarter could trail analysts' expectations, The Wall Street Journal reports.

"People have been expecting better earnings forecasts, but I'm a little more concerned that earnings estimates are going to be ticking down," Robert Pavlik, chief market strategist at Banyan Partners, tells The Journal.

As for Parker, he's enticed by small-cap stocks. "They've sold off a lot," he notes. The Russell 2000 index of small-cap stocks has dropped 8.1 percent from its March 4 record high.

"I think about small caps this way: they're going to grow a lot faster in our base case, they have more ability to expand their margins from here [and] they're more nascent than the M&A [mergers and acquisitions] cycle."

Editor’s Note: Get These 4 Stocks Before 399% Stock Market Rally!

Related Stories:

• Yardeni: Stock Correction Just Gives More Juice to Bull Market
• CNBC's Insana: Stocks on Edge of 'Very Nasty' Correction