Market Preview: Hitting Pause

Updated from 5:58 p.m. ET to include after-hours trading action.

NEW YORK (TheStreet) -- The orderly rally of 2012 seems to be giving way to an equally polite sell-off.

The theory for a while now has been that stocks were just waiting for a reason to pull back. Well, it would be difficult to find a riper reason than the weak employment report that arrived Friday yet Monday's low-volume selling never reached anything near panic proportions.

That said, all three major U.S. equity indices are now the proud owners of four-day losing streaks, and the damage is starting to add up. The Dow Jones Industrial Average, for example, is off nearly 335 points, or 2.5%, in that stretch.

That marks the blue-chip index's largest four-day points decline since mid-December when this latest bull run was still finding its footing, according to data complied by Dow Jones Indexes. The S&P 500 has given back 2.6%, and the Nasdaq has surrendered 2.3% over the same period. At the very least, the pause button has been hit, but even the bulls would probably like to see a deeper drop with heavier volume to better establish a level to rally further from.

The problem (of sorts) though is that real fear still seems to be a ways away.

Consider that much of the commentary around the shortfall in job creation last month was inclined to view the miss against the larger backdrop of the progress made over the last few months, rather than a sign of more weakness to come. UBS, for example, is still on board with the view that the slow recovery remains intact.

"Smoothing through the monthly volatility there has been net improvement in payrolls this year," the firm said Monday. "In the first quarter, payrolls have gained 212k per month on average, up from 152k per month in 2011. The pace so far this year is more than strong enough to keep the unemployment rate declining. Healthy bank lending should help support a solid trend in payrolls. We still expect a 200k trend in private-sector job growth in coming months."

Then there's the argument that the jobs number disappointment just increases the likelihood that the Federal Reserve will need to come through with more stimulus, so that may be luring some cash off the sidelines.

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