Stocks tumble after weak jobs report

Brendan Mcdermid / REUTERS

Traders work on the floor of the New York Stock Exchange.

By msnbc.com news services

Major stock indexes fell Monday after last week's much weaker-than-expected report on March U.S. job creation.

The Dow Jones industrial average was lately down over 100 points and trading below the 13,000 level.

U.S. non-farm payrolls grew by 120,000 last month, far below the forecast gain of 203,000 jobs. The unemployment rate dipped to 8.2 percent, down from 8.3 percent in February.

The report casts doubt over the ability of the United States to help boost the global economy as Europe's debt crisis resurfaces and worries remain whether China's economy will avoid a hard landing.

?The jobs report really sobered us up,? said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in Albany, N.Y.

Johnson said that, with the market already up sharply since last October, a slower economy is one of the headwinds for stocks. Other headwinds include a deceleration in earnings growth and slower growth in China and Europe.

?This slower growth is going to be a disappointment to Wall Street, which tends to be impatient and wants stronger growth,? he said.

Surprisingly soft producer prices data in China sparked concerns of waning demand, reinforcing expectations that a cooling economy has eclipsed inflation as the Chinese government's biggest near-term worry.

A lack of major U.S. economic data on Monday will keep investors focused on Friday's payrolls report, which came in on an equity market holiday.

"Markets are responding to the weak jobs report," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

"Certain sectors are most closely tied to economic growth and those are the ones that will more closely feel the pain," he said.

Cardillo said he doesn't see the expected decline as the beginning of a correction but as a buying opportunity.

The weak payrolls report could renew hopes for more monetary stimulus from the Federal Reserve. The central bank last week released minutes from its March meeting that suggested less of an appetite among committee members for more stimulus despite their expressing worries about the sluggish pace of U.S. growth.

U.S. equities have rallied sharply in recent months, gaining nearly 30 percent since early October to push the S&P 500 near four-year highs. The market has stalled in the last few weeks as investors question the swiftness of the gains and whether economic data is strong enough to warrant higher stock prices.

Earnings will come to the fore this week, with bellwethers Google Inc and JPMorgan Chase & Co expected to report results. Alcoa will on Tuesday be the first Dow component to report.

AOL shares jumped after the internet company said it would sell over 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.

Reuters contributed to this report.

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