Slumping Financials Signalling Pullback? (CALL, MOH, CNC, AGP, AOL, MSFT, SFLY, TSL)

Not surprisingly, stocks slumped to start the week after the Labor Department released a much weaker-than-expected jobs report when the market was closed on Friday. The decline was the fourth straight for the S&P. While tech has held up well, financials have weakened, in what could be the start of the market pullback we have been looking for. Nonetheless, earnings season is about to begin, and we would expect earnings-related news to help dictate how the market performs over the next few weeks.

The Search Engine Stocks Index was the top performing tickerspy Index on the day, led by AOL Inc (AOL) with a 43% gain. The Chinese Solar Stocks Index was the day’s worst performing tickerspy Index, with Trina Solar (TSL) down -7%.

Stocks fell on the day, with the Dow off -131 points to 12,930. The S&P slipped -16 points to 1,382, while the Nasdaq dipped -33 points to 3,047. Oil tumbled -85 cents to $102.46 a barrel, while gold rose $13.80 to $1,643.90 an ounce.

In economic news, the Labor Department said last Friday that U.S. employers added 120,000 new jobs in March, well below the 240,000 added in February and far short of the 205,000 economists expected.

In earnings news, shares of VoIP provider MagicJack (CALL) surged 10.9% after the Israeli company forecast a first-quarter profit of $7.8 million, or 37 cents per share, compared with $1.8 million, or 8 cents per share, a year earlier. On an adjusted basis, MagicJack expects to earn 26 cents a share on revenue of $37.4 million. Revenue in the year-earlier quarter was $30.8 million. Analysts were only looking for EPS of 13 cents on revenue of $35.7 million. Two pros counted MagicJack among their top holdings at the end of Q4 and nearly 40 tickerspy members own the stock in their portfolios.

Shares of Molina Healthcare (MOH) plunged -26.7% after the state of Ohio opted to shut the company and two of its rivals out of contract to manage 1.5 million Ohioans on Medicare. Shares of Centene (CNC) and Amerigroup (AGP) slid -15.4%% and -4.9%, respectively, on the news.

Shares of Internet company AOL soared 43.3% after the company announced it will sell 800 patents to rival Microsoft (MSFT) for more than $1 billion. Dow component Microsoft did not say what the patents pertain to. Three pros counted AOL among their top holdings at the end of Q4 and more than 80 tickerspy members own the stock in their portfolios.

Social media giant Facebook, which said last week it will list shares on the Nasdaq when it commences its IPO next month, agreed to acquire privately held Instagram for $1 billion in cash and shares. The deal represents Facebook’s largest acquisition to date. Instagram is a photosharing service that lets users add filters and effects to photos taken from their smartphones. Shares of online printing service Shutterfly (SFLY) fell -4.3% on the news.

Tags: AGP, AOL, CALL, CNC, MOH, MSFT, SFLY, TSL