The S&P 500 has pulled back more than 4% from its recent high of $4,540. Analysts at investment banking giant Morgan Stanley foresee an even deeper correction. “The typical mid-cycle ‘fire’ outcome would lead to a modest and healthy 10% correction in the S&P 500. However, the ‘ice’ scenario is starting to look more likely, and could result in a more destructive outcome – i.e. a 20%+ correction,” Morgan Stanley’s research team said in the U.S. Equity Strategy note published Monday.