Stocks moved higher Thursday ahead of the Good Friday market closure, snapping a two-day losing streak and keep the major averages above major technical support levels. Trading was quiet as everyone waits for Friday’s jobs report for clues as to the path and timing of the Federal Reserve’s rate-hike campaign.
In the end, the Dow Jones Industrial Average gained 0.4%, the S&P 500 gained 0.4%, the Nasdaq Composite gained 0.1%, and the Russell 2000 gained 0.3%.
Technology stocks were the laggards, down 0.1% as a group after Micron Technology, Inc. (NASDAQ:MU) lost 1.5% following a beat on earnings but weaker forward guidance. Google Inc (NASDAQ:GOOG, NASDAQ:GOOGL) was also weak, losing 1.3% to return to levels not seen since February.
Financials were on the move thanks to a rise in Treasury yields, adding 0.6% as a group.
The action was in commodities, where crude oil churned in response to headlines that an outline to a deal concerning Iran’s nuclear program was agreed to, with negotiations to continue into the summer. The initial headlines pushed crude oil lower — on anticipation of an end to Western sanctions and the addition of Iranian crude oil onto the cash market — before they rebounded as traders looked at the details of what was actually accomplished.
As a result, the United States Oil Fund LP (ETF) (NYSEARCA:USO) ended with a tiny 0.1% loss while energy stocks, as represented by the Energy SPDR (NYSEARCA:XLE) gained 0.2%.
Initial jobless claims were in focus as the Fed said in its last policy statement that a continued labor market recovery was a precondition for a liftoff on interest rates from 0% — where they’ve been since 2008. Claims came in at a better-than-expected 268,000 versus 288,000 the week before. Analysts were looking for 285k.
Still, the expectation is for a slight cooling in the pace of job creation given an increase in jobless claims in March and a recent slide in the private-sector ADP payroll report (the latest of which was released on Wednesday).
For the week, the Dow Jones gained 0.3%, the S&P 500 gained 0.3%, the Nasdaq lost 0.1%, and the Russell 2000 gained 1.2%.
The results from Friday’s jobs report, and the start of the Q1 earnings season next week, should increase the excitement and volatility and snap stocks out of the daze they’ve fallen into.
I’m looking for a slowdown in payroll growth to raise hopes the Fed delays its rate liftoff until late 2015 or possibly early 2016. That should weaken the dollar and lift foreign equities via currency effects. In response, I’ve recommended the Vanguard FTSE All-World Ex-US ETF (NYSEARCA:VEU) to Edge subscribers — a position that looks ready for an upside breakout.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters.
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