Renewed concerns over Europe's economy led off the market's free fall early today, and while the Dow Jones Industrial Average (DJINDICES:^DJI) has climbed out of an early hole, it remained 49 points in the red as of 2:30 p.m. EDT. Home Depot's (NYSE:HD) sunk to the bottom of the Dow, losing 1.9%, after analysts soured on the stock. Let's catch up on what you need to know.

Is Europe in trouble?

A branch of Banco Espirito Santo in Lisbon, Portugal. Source: Wikimedia Commons.

Portuguese bank Banco Espirito Santo ignited today's fresh concerns over the European recovery as the bank looks to renegotiate its debt with creditors. Espirito Santo is looking at a capital shortfall of up to 3 billion euros, according to the Financial Times, sparking fears that Portugal's government might need to prop up the bank. While there's no sign yet of any broader problem in Europe's financial climate, the concerns over Espirito Santo's solvency have Wall Street on edge over the continent's progress -- particularly as peripheral nations continue to struggle in posting consistent growth. Italy and France have seen industrial production fall off sharply recently, and high unemployment still rages in Spain.

The major takeaway: Europe is still far away from getting its feet all the way under it, and Germany remains the lone center of investor confidence for now.

Meanwhile, Deutsche Bank (NYSE:DB) cut its profit projections for Home Depot and rival Lowe's today, after competitor Lumber Liquidators Holdings (NYSE:LL) released poor earnings results. Deustche Bank also noted that the housing market has fallen off in 2014 from last year's pace, a trend that won't help Home Depot if it continues.

Why the pessimism from Lumber Liquidators? The company cautioned that second-quarter results will be affected by lower than expected traffic, and it projected same-store sales to fall by more than 7%. Lumber Liquidators' projections for earnings and revenue fell far below analyst projections for the quarter, leading to a disastrous 20% drop in the stock so far today.

That drop-off in traffic and its impact on sales has investors running from Home Depot as well, and all eyes are on next month's earnings release from the No. 1 home-improvement retailer. Home Depot has held on to growth as of late: While the retailer posted disappointing first-quarter results, it still managed same-store U.S. sales growth of more than 3% and per-share earnings growth of more than 12%. year over year. However, if Home Depot fails to keep up in its next earnings release, investors could start growing anxious. This stock has fallen by more than 1% year to date, and a disaster like what happened to Lumber Liquidators for the quarter could send shares into a dive.