Stocks closed lower for the fourth-consecutive trading session Monday, led by weakness in banks and energy, as investors turned cautious over a slowdown in the recovery.
The Dow Jones Industrial Average fell 61.30 points, or 0.5 percent, to finish at 12,089.96, led by JPMorgan and Bank of America, after tumbling almost 100 points on Friday to finish lower for the fifth-consecutive week. If stocks finish lower again this week, it will be the longest losing-streak since 2002.
The S&P 500 slipped 13.99 points, or 1.08 percent, to end at 1,286.17, breaking through the 1,295 support level earlier in the session. Some experts believe 1,227 is the next support level for the S&P.
The tech-heavy Nasdaq declined 30.22 points, or 1.11 percent, to close at 2,702.56.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose to trade above 18.
All 10 key S&P sectors slipped, led by energy and financials.
“There’s still a significant fallout from Friday’s lack of jobs creation, which has raised questions around government spending in jobs creation programs,” said Tim Speiss, Chairman of the Personal Wealth Advisors for EisnerAmper.
Speiss said markets will continue to trade sideways until September when he expects the economy to start seeing a turnaround.
However, some strategists at UBS believe that while equity markets are likely to remain volatile in the near-term, growth is expected to reaccelerate in the second half of this year, with the S&P finishing at 1,410.
"We continue to emphasize that while there are a lot of growth concerns in the U.S., corporates are still well valued," said Katie Klingensmith, economic and policy analyst, UBS Wealth Management Research. "We are overall positive on risk assets."
Goldman Sachs dissected the reason behind the sluggish growth in a new report, saying growth will probably rebound in the second half of the year as commodity prices drop back and any Japan-related disruptions unwind.
But the disappointing jobs report does not change the outlook for the economy and chances of a tighter policy in 2011 is "certainly possible" by year-end, said Philadelphia Fed President Charles Plosser, a well-known inflation hawk who has a vote on policy this year.
Bank stocks declined across the board, extending last week's decline, following chatter that Washington is thinking of increasing capital requirements.