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This week began on the same negative tone that last week ended on. There were no economic reports today, but an unexpected European problem surfaced as the Constitutional Court in Portugal ruled out a number of austerity measures that the Portuguese administration had implemented, pursuant to the requirements of the ECC, IMF and EC. This creates a dilemma for both Portugal and the troika.

And this news was the centerpiece of uncertainty against a backdrop of continued sabre rattling from North Korea, countered by equal sabre rattling from South Korea and the U.S. Accordingly, the Korean situation seems to be at its highest danger point in some time. Furthermore, the majority of economic releases last week were as disappointing as they had been the previous week. The employment reports -- ADP, Initial Jobless Claims and Unemployment -- were much more negative than expected, overshadowing a good Factory Orders report earlier in the week. Concern increased about steadily growing negative pressure on the domestic economy as sequestration implementation moves forward with little agreement between our Congress and Presidential Administration on less painful and perhaps more thoughtful choices.

Last week's market performance and today's open resembled the classic flight-to-safety that we have been experiencing, with large caps favored over small caps and value favored over growth. Large-cap Value has been the favored cap/style over both the last week and the last month. Mid-cap Value has led the past 3-, 6- and 12-month periods. From a sector viewpoint, Utilities were actually up over 1% for the week, with other flight-to-safety sectors like Telecom, Financials, and Healthcare generating small profits. The resurgence of housing kept Consumer Non-Cyclicals in the black as well. Energy was worst off with a loss of -1.76% as oil prices fell. Technology, Basic Materials, and Industrials were negative as well. Consumer Non-Cyclicals was the least negative of the losing sectors.

Somewhat surprisingly, the market closed a bit stronger today with all major indices marginally in the black. All sectors were positive, too, which to us, is an indication of broad non-specific buying after the nearly 2% fall from the latest "new high" for the S&P 500. Alcoa's (NYSE:AA) announcement was a positive surprise on earnings but a negative surprise on revenues, which is exactly what the analysts were worried about for this quarter. Alcoa, however, is hardly any longer considered a bellwether stock, so we should see what the rest of the week brings before getting too negative. Today demonstrated there is still money on the sidelines; however, clearly caution is on order.

Here are the Market Stats.

3 Stock Ideas for this Market

This week we selected three stocks from the GARP preset search in MyStockFinder, with special consideration given to Healthcare and Cyclical Consumer Goods

ZAGG INC. (NASDAQ:ZAGG) - Cyclical Consumer Goods

Trading for 16.27x current earnings, 5.63x forward earnings

Projected EPS growth: 22% 5-year, 43.7% 2013, 31.2% current quarter

1 out of 6 covering analyst has revised estimates up in last 30 days

Macy's, Inc. (NYSE:M) - Cyclical Consumer Goods

Trading for 13.6x current earnings and 9.9x forward earnings

Projected EPS growth: 13% 5-year, 12.4% in 2013, 25.6% current quarter

United Therapeutics Corporation (NASDAQ:UTHR) - Healthcare

Trading for 10.5x current earnings and 8.5x forward earnings

Projected EPS growth: 32% 5-year, 10.7% in 2013, 14% current quarter

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Source: What Will First Quarter Earnings Bring?