What happens in European markets doesn't stay in Europe. The markets are selling off across the board this morning as eurozone economic data paints a bleak picture of a stalling recovery. EU factories saw their worst monthly performance in nearly three years, and Spain reported its economy shrank for the second straight quarter as painful austerity measures have put the continent on weaker footing than even the United States' tepid recovery.

With that in mind, let's take a closer look at how the major indexes are faring today and drill down on a few stocks caught up in today's action.

Source: Yahoo! Finance.

The Dow is faring better than the two other major indexes despite all of its components losing ground. Notably, Wal-Mart (NYS: WMT) is caught in a Mexican bribery scandal that has the Department of Justice investigating the world's largest retailer. Shares are down 4.5% as reports allege executives at the company squashed an internal probe over whether the company's Mexican subsidiary bribed members of that country's government -- a big no-no according to the Foreign Corrupt Practices Act -- to facilitate store openings. Although some call today's weakness a buying opportunity, with shares still near 52-week highs, it may make sense to wait until more details emerge.

Europe is not just hammering today's markets, but also took a blow torch to Kellogg's (NYS: K) recent quarter. Due in part to weaker sales growth in Europe, the cereal giant reported soggy guidance that sees Kellogg notching (at its midpoint) $3.24 in 2012 profit per share as opposed to analysts' estimated $3.48 per share annual gain. Management also expects a small operating profit decline as well. We will have to wait until Thursday to conduct the official first quarter postmortem, but 2012 is shaping up to be worse than 2011 for Kellogg.

As you can see, earnings undoubtedly move the market, but to play them right you've got to know what to look for. That's why our analysts wrote this free report: "5 Stocks Investors Need to Watch This Earnings Season." You can learn more about these stocks by clicking here. Enjoy, and Fool on!