1-13-14 10:00 AM EST | Email Article

By Anora Mahmudova, MarketWatch


NEW YORK (MarketWatch) -- U.S. stocks began the week on a down note, as investors pondered last week's disappointing jobs data and their impact on the Fed's tapering of monetary stimulus.


Weighing on sentiment was a research note from David Kostin at Goldman Sachs, who said that the S&P 500 valuation is looking "lofty by almost any measure."


The S&P 500 index (SPX) opened 2 points or 0.1% lower at 1,840.41. The benchmark index closed higher on Friday, recording its first weekly gains since the new year.


The Nasdaq Composite (RIXF) opened down 5 points or 0.1% to 4,169.88.


The Dow Jones Industrial Average (DJI) opened 19 points, or 0.1% lower at 16,415.34.


On Friday, the government reported that the U.S. economy added 74,000 jobs in December, the smallest gain in three years and well below economists' forecast of 225,000. However, markets shrugged off the figures by the end of the session and closed mostly higher, suggesting that investors may be regarding the small gain as a one-off aberration due to cold weather.


Later on Monday, The Atlanta Fed's Dennis Lockhart is due to speak at 12:40 p.m. Eastern Time. At 2 p.m. Eastern Time the U.S. Treasury will release a report on the Federal budget for December.


This week, investors will focus on retail sales and inflation data as well as earnings reports from large banks such as J.P. Morgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS)Read: Retail data, Beige Book in view after weak jobs futures


* Comment: Nicholas Colas, chief market strategist at ConvergEx Group, a global brokerage company based in New York, wrote in a note: "The most disappointing number from Friday's Employment Report was not the miss to jobs growth expectations (74,000 versus the hoped for 200,000), but rather the continued precipitous decline in labor force participation. At 62.8%, this measure of people actually working or looking for employment has slumped back to the levels of the 1970s economic malaise. More importantly, the trend here has outstripped the U.S. Government's forecasts, which only called for such a level around 2020. January 2013 may not see any improvement if Congress does not extend emergency unemployment benefits, with participation dropping further if the long-term unemployed chose to exit the workforce as a result. That would leave the Fed with an unwelcomed communications problem: quickly drop the 6.5% threshold unemployment rate from its monetary policy, or risk being seen as out of touch."


* Movers and shakers: Beam Inc. shares surged 24% in premarket on news that it will be acquired by Suntory Beverage Food Ltd. in a $16 billion deal, including debt. Shares of Alnylam Pharmaceuticals Inc. jumped 30.9% in premarket trading on news Sanofi SA will buy a 12% stake in the company to strengthen its new drug pipeline. The two firms will extend research collaboration to develop and sell new drugs aimed at treating rare genetic disorders. Shares of Twitter Inc. rose 4.2% after Goldman Sachs lifted its price target for the social media network to $65 from $46 and maintained a buy rating. Wendy's Co.shares rose 8.9, as the fast-food company's expected adjusted earnings per share were higher than analysts expected. Wendy's also said its board had authorized a stock buyback program of $275 million. Shares of Lululemon Athletica Inc. dropped 14.9% in premarket after the company cut its profit view.


* In other markets:Europeanand Asian stocks rose on Monday. Erlam says markets seem to be "still stuck in a very unusual environment in which investors can't decide what is actually more beneficial for the stock markets, positive fundamentals or more quantitative easing." Gold and oil prices were lower, while the dollar pushed higher.


More stories from MarketWatch:


Stock investors get ready for big bank earnings


Retail data, Beige Book in view after weak jobs figures


Banks, hedge funds and what Citi has to tell its rich clients


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(END) Dow Jones Newswires

January 13, 2014 10:00 ET (15:00 GMT)

Copyright (c) 2014 Dow Jones & Company, Inc.
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