Pre-Market Brief:

MARKET SNAP:  At 5:25 a.m. ET, S&P 500 futures down 0.4%. Treasury futures fall. Nymex crude down $1.68 at $81.55; gold at $1,621.10, down $5.20. In Europe, FTSE 100 closed, DAX down 1.2% and CAC 40 up 0.5%. In Asia, Nikkei 225 down 1.7% and Hang Seng down 2%.

Watch for: April factory orders due at 10:00 a.m. Dollar General highlights a short list of companies reporting quarterly results.

The Breakfast Briefing

For stock investors, its going to get worse before it gets better.

In the aftermath of the stock market’s biggest decline of the year on Friday, investors are bracing for more volatility in the coming weeks amid growing worries over Europe’s debt crisis and a slowing U.S. economy.

After Friday’s poor jobs report, the S&P 500 fell sharply through its 200-day moving average, a technical level chart watchers follow closely as confirmation of the market’s short-term direction.

A loss of support always raises the risk of quick panic selling, says Jason Goepfert, market-sentiment watcher at Sundial Capital Research.

Similar steep declines through this technical level took place right before market crashes in 1929 and 1987. During the next two weeks, the S&P shed an additional 20% after those occurrences, he says.

On a more immediate basis, the S&P tumbled through its 200-day moving average in May 2010 and Aug. 2011. In both instances, several months of choppiness ensued.

The Dow has given back all of its 2012 gains and the S&P 500 is on the brink of entering correction territory, considered a 10% decline from a recent peak.

A confluence of events has led investors to dump stocks in a hurry throughout the last few weeks. From worries about China’s slowing economy, to concerns about Spain’s banking woes and Greece potentially leaving the euro zone, investors have been flocking out of stocks and into safer assets, such as Treasury bonds.

The focus now shifts to what, if anything, central bankers can do to halt the selloff. Two key events are expected this week: Members of the European Central Bank will meet on Wednesday to discuss interest rates, and Fed Chairman Ben Bernanke is expected to testify before Congress on Thursday.

Pressure is mounting on the ECB to do something to stem Europe’s debt crisis, including additional rate cuts or more bond buying. Meanwhile, investors are hoping Mr. Bernanke will swoop in as the market’s white knight and announce additional measures to spur the economy.

The sharp velocity of the recent declines has prompted some market watchers to wonder if stock investors have thrown in the towel.

We may be seeing the final flush out of stocks with [Friday’s] lousy performance, says Mark Arbeter, chief technical strategist at S&P Capital IQ. The correlation of stock performance during recent weakness has all the signs of throwing everything out of one’s portfolio, which, to us, is a sign of capitulation.

But capitulation calls may be premature.

With Mr. Bernanke testifying and an ECB meeting on tap this week, French and Greek elections on the horizon and a summit of EU leaders expected at the end of the month, the worst is far from over.

Morning MarketBeat Daily Factoid. On this day in 1984, Bruce Springsteen released the album “Born in the USA.” It was his seventh studio album.

-Steven Russolillo

Stocks to Watch

Groupon shares fell 9% Friday following the expiration of the company’s insider lock-up period after its IPO, meaning that 93% of its outstanding shares are now available to be sold.

Hewlett-Packard shares also fell Friday, slumping more than 6% to become the worst performer on the Dow Jones Industrial Average after Jefferies & Co. cut its rating on the tech heavyweight to hold from buy.

But shares of Newmont Mining gained 6.7%, bouncing back from losses in Thursday’s session as gold futures drew risk-averse buyers. Read more about Friday’s rally in gold.

Overnight Headlines (Links)