MarketView for April 9

Summary

It was not a great day on Wall Street on Monday; not that it was unexpected. In fact, you could almost say that it was a self-fulfilling prophesy. Nonetheless, by the closing bell the Dow Jones Industrial Average and the S&P 500 indexes had extended their losses to a fourth consecutive da.

The cause of all the dismay was last week's disappointing jobs report, which raised fresh concerns over the possibility that the economy's recovery may be at a temporary plateau, or even worse, falling backward. Yet, despite Monday's declines, the Dow and the S&P 500 both ended the day’s trading activity above their session lows.

Banks and industrials led the S&P 500's slide, with the S&P financial sector index and the S&P industrial sector index each down 1.6 percent. The two sectors are closely tied to the prospects for economic growth.

The latest jobs figures added to a series of weaker-than-expected indicators, which have taken the edge off a strong multi-month rally. As a result, the CBOE Volatility Index or VIX rose 12.63 percent on Monday to end at 18.81. The VIX is up about 21.4 percent so far in April.

Stocks have rallied sharply in recent months, with the S&P 500 climbing nearly 30 percent from its early October closing low to end at nearly a four-year high a week ago.

Volume was extremely light, with about 5.52 billion shares changing hands on the three best known equity exchanges, a number that was well below last year's daily average of 7.84 billion shares.

The S&P 500 slid on Monday to a session low at 1,378.24, its lowest point in more than three weeks. But the benchmark index recovered some of that lost ground in afternoon trading and held well above its 50-day moving average near 1,371.

In addition to the jobs numbers released last week, China's surprisingly soft producer prices data sparked concerns about waning demand in the world's second-largest economy. The country's March PPI data reinforced expectations that a cooling economy has eclipsed inflation as the Chinese government's biggest near-term worry.

Non-farm payrolls added 120,000 jobs in March, far below the forecast gain of 203,000 jobs, according to Labor Department data released on Friday, a market holiday. The unemployment rate slipped to 8.2 percent in March from February's 8.3 percent. The payrolls report cast doubts on the United States' ability to help bolster the global economy as Europe's debt crisis resurfaces and worries remain whether China's economy will avoid a hard landing. But at the same time, it renewed hopes for more monetary stimulus from the Federal Reserve.

AOL ended the day up 43.3 percent to close at $26.40, touching a lifetime high of $27.47 earlier in the session after the Internet company said it would sell more than 800 of its patents and related applications to Microsoft, and grant Microsoft a non-exclusive license to patents it retains for slightly over $1 billion in cash. Microsoft, a Dow component, lost 1.3 percent to $31.10.

Following last week's modest losses, the S&P 500's key near-term support levels were 1,375 to 1,380, which were its resistance levels in late February.

Earnings will be the key to the Street’s activity this week as we move solidly into the upcoming earnings season.  Google and JPMorgan Chase are scheduled to report results. Alcoa will, as is traditionally the case, be the first Dow component to report results, with earnings due out after Tuesday's closing bell.

Molina Healthcare closed down 26.7 percent to $25.65 after the health insurer said its Medicaid contract in Ohio would not be renewed.