LONDON (ShareCast) - US equities closed Monday's session lower as investors reacted to the weak job report for March released last Friday. Additionally, inflation data in China came in above estimates. The KBW Banks index was among the most bearish sectors, falling 1.9 per cent to 47.92 points.

US traders did not appear to pay much attention to Spain's latest decision to cut spending in health and education by 10 billion euros in 2012.

Market outlook

US analyst Marc Faber expects US equities to begin a significant correction. He does not rule out a bear market (more than 20% decline) although he sees the possibility limited by future quantitative easing from the Federal Reserve.

Faber told CNBC that the number of new highs are falling, trading volume is weak, and inside selling reaches record levels. He also pointed out weakness in sectors that are sensitive to economic cycles, such as Mining and Industrial Goods. Last Friday’s employment report also indicates a weak economic recovery, Faber explained.

Economy

The US employment report on Friday showed that 120,000 jobs were created in March, much lower than the 203,000 expected by the consensus. The unemployment rate fell to 8.2% from 8.3%.

February’s jobs figure was revised higher to 240,000 from 227,000. However, January’s figure was revised lower to 275,000 from 284,000.

Inflation rose more than expected in China. the Consumer Prices index (CPI) rose to 3.6% from 3.2% compared to the consensus estimate of 3.2%. Barclays Capital strategist Ju Wung defined the data as very high and disappointing.

Corporate

AOL (+43%) sold 800 patents to Microsoft for $1.056bn in cash. The proceeds will be destined to shareholder retribution.

AT&T sold its Yellow Pages business to Cerberus Capital for $950m and a 47% stake of the future company.

Great Wolf Resorts (+13%) received an improved offer of $7 per share by KSL Capital Partners.

BTIG analysts downgraded Apple (+0.4%) to hold from buy.

Sherwin-Williams (+0.9%) raised its first quarter EPS estimate to $0.92 - $0.95 compared to its prior estimate of $0.56 - $0.74.

The earnings season will begin on Monday after the market close. Alcoa will present its earnings.

Trading volume

On the NYSE, 3.084bn shares were traded. Trading volume on the Nasdaq was 1.348bn shares. Overall, losing stocks outnumbered winning stocks by a rate of 4 to 1.


S&P 500 - Risers
D. R. Horton Inc. (DHI) $14.70 +4.63%
Supervalu Inc. (SVU) $5.32 +3.70%
eBay Inc. (EBAY) $36.30 +1.91%
Carnival Corp. (CCL) $31.02 +1.11%
Priceline.Com Inc. (PCLN) $764.75 +1.05%

S&P 500 - Fallers
St Jude Medical Inc. (STJ) $38.91 -5.03%
Genworth Financial Inc. (GNW) $7.69 -4.47%
Lincoln National Corp. (LNC) $24.48 -4.19%
Masco Corp. (MAS) $12.27 -3.92%
First Solar Inc. (FSLR) $20.19 -3.77%
Metropcs Communications Inc. (PCS) $8.52 -3.73%
Principal Financial Group (PFG) $28.23 -3.65%
Quanta Services Inc. (PWR) $20.89 -3.51%
Laboratory Corporation of America Holdings (LH) $89.99 -3.49%
Netflix Inc. (NFLX) $106.68 -3.46%

Dow Jones I.A - Risers
McDonald's Corp. (MCD) $98.88 +0.26%
Hewlett-Packard Co. (HPQ) $23.14 +0.13%

Dow Jones I.A - Fallers
Bank of America Corp. (BAC) $8.93 -3.25%
Walt Disney Co. (DIS) $42.11 -2.25%
Caterpillar Inc. (CAT) $103.57 -2.17%
United Technologies Corp. (UTX) $80.23 -1.68%
American Express Co. (AXP) $57.16 -1.62%
Boeing Co. (BA) $72.43 -1.58%
General Electric Co. (GE) $19.20 -1.49%
E.I. du Pont de Nemours and Co. (DD) $51.95 -1.42%
Travelers Company Inc. (TRV) $58.05 -1.41%
Microsoft Corp. (MSFT) $31.10 -1.33%

Nasdaq 100 - Risers
Seagate Technology Plc (STX) $26.51 +3.08%
Research in Motion Ltd. (RIMM) $13.02 +2.76%
eBay Inc. (EBAY) $36.30 +1.91%
Priceline.Com Inc. (PCLN) $764.75 +1.05%
Nll Holdings Inc. (NIHD) $18.27 +0.61%
Illumina Inc. (ILMN) $52.62 +0.55%

Nasdaq 100 - Fallers
Vertex Pharmaceuticals Inc. (VRTX) $38.11 -4.84%
First Solar Inc. (FSLR) $20.19 -3.77%
Citrix Systems Inc. (CTXS) $75.77 -3.21%
Foster Wheeler AG (FWLT) $21.78 -3.20%
Hologic Inc. (HOLX) $21.20 -3.20%
PACCAR Inc. (PCAR) $44.58 -3.00%
Mylan Inc. (MYL) $21.98 -2.70%
Fastenal Co. (FAST) $51.58 -2.63%
Warner Chilcott Plc (WCRX) $15.79 -2.47%
Gilead Sciences Inc. (GILD) $46.59 -2.45%

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