NEW YORK — U.S. stocks Monday suffer their worst drop in a month as investors got the first chance to react to the March nonfarm-payrolls report, which showed companies adding fewer jobs than expected.
NEW YORK — U.S. stocks Monday suffer their worst drop in a month as investors got the first chance to react to the March nonfarm-payrolls report, which showed companies adding fewer jobs than expected.
“There’s some profit-taking on the jobs report on Friday, which was a disappointment, but if you average job increases for this year, it’s still over 200,000 so it’s not that bad a number,” said Michael Gibbs, co-head of the equity-advisory group at Raymond James.
The Labor Department last Friday said U.S. employers added 120,000 jobs last month, with the number below 200,000 for the first time since November. Equity markets were closed Friday for the Good Friday holiday.
“We had such a mild winter, so it looks like some jobs were pulled forward in January and February, so it is probably more important to average those three months,” added Gibbs. “We still expect decent job growth this year,” he predicted.
The Dow Jones Industrial Average closed down 130.55 points, or 1 percent, to 12,929.59, with Bank of America Corp. leading the declines that included all but two of its 30 components.
The S&P 500 Index declined 15.88 points, or 1.1 percent, to 1,382.20, with financials and industrials hardest hit among its 10 major sectors. All closed lower.
It was the biggest percent drop for the Dow and S&P 500 since March 6 and extended their losing streak to four sessions — the longest such streak since the one ended Jan. 31.
“Most of us have been thinking (a pullback) is long overdue; markets don’t move in straight lines, you don’t have to pull back dramatically, but you at least need to pause,” commented Gibbs, who pegs near term-support on the S&P 500 at 1,360 to 1,374.
Whether the market has “the first decent pullback for 2012 is still to be determined,” he said, depending on how the bond market in Spain behaves when European markets reopen on Tuesday and on U.S. economic data this week, particularly Thursday’s weekly claims data. The Nasdaq Composite Index fell 33.42 points, or 1.1 percent, at 3,047.08.
“Volume is light today so everyone is not hitting the exit door en masse,” according to Gibbs at Raymond James.
For every stock rising, about four fell on the New York Stock Exchange, where 724 million shares traded. NYSE composite volume was about 3.1 billion, or 82 percent of the last month’s average.
AOL Inc. shares rallied 43 percent after the online company said it would sell more than 800 of its patents and related applications to Microsoft Corp. for more than $1 billion, with the deal including a nonexclusive license to the patents it still holds. Avon Products Inc. fell 3.1 percent after the beauty-products company named Sherilyn McCoy, a former executive at Johnson & Johnson, to be its chief executive, starting in two weeks. Avon’s board last week spurned a takeover approach by France’s Coty Inc.
May crude futures fell 85 cents to close at $102.46 a barrel amid optimism that international talks this week could lessen the odds of military action over Iran’s nuclear program.
In days ahead, Wall Street’s gaze should turn to first-quarter corporate earnings reports, with aluminum producer and Dow component Alcoa Inc. releasing its results on Tuesday. J.P. Morgan Chase & Co. and Wells Fargo & Co. report on Friday.
“We’re going to be shifting a little from the macro to the micro with Alcoa,” earnings, said Myles Zyblock, chief equity strategist at RBC Capital Markets.
One element that could support stocks is that companies have set a relatively low bar to beat.
“Companies have been very cautious in guidance,” he added.