Watch for a dead cat bounce in some of the former high-flying Internet and biotech names, but any rebound may be short-lived.
Even if the market does get a lift, it needs a catalyst to sustain any gains, and traders are looking to the start of earnings season. Alcoa reports Tuesday after the close, and JPMorgan Chase and Wells Fargo report Friday.
Stocks have sold off amid concerns the economy will not accelerate enough to offset the impact of the Fed pulling back from its quantitative easing program. That worry was compounded after Friday’s March jobs report showed 192,000 jobs, just about what was expected, but traders had been hoping for a strong snap back from sluggish hiring in the winter months.
“I don’t think earnings are going to disappoint,” said Milton Ezrati, market strategist and economist at Lord Abbett. “They may show people that the world’s not going to come to an end just because names in social media are blowing up.” Ezrati said besides the overvaluation in Internet, social media and biotech stocks, the market is skittish about the situation in Ukraine and fears that Russia will move into the country, after seizing Crimea.
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