The S&P 500 gave up most of its 1.22% gain from the oversold rebound on Monday to close on Thursday at 2,066.96, up 0.29% for the short trading week. ADP, a private payroll processor, said on Wednesday that businesses added 189,000 jobs in March, far short of the economists’ forecast for a gain of 225,000 jobs. The report is a measure of non-farm private sector employment of about 400,000 U.S. businesses which are clients of ADP. 

The Institute for Supply Management (ISM) also said on Wednesday that its manufacturing index declined to 51.5% last month, from 52.9% in February, marking the fifth straight drop and missing Wall Street's expectations of 52%. A reading over 50% indicates more companies are expanding. Their Employment index slipped 1.4% to 50%, below the February reading of 51.4%, reflecting unchanged employment levels from February, said the ISM. 

In plain English, U.S. manufacturing stalled in March and employment levels have also weakened.

The Bureau of Labor Statistics (BLS), the U.S. Labor Department, said on Friday that the U.S. economy added 126,000 jobs and the unemployment rate held steady at 5.5%. It was a huge miss as economists expected nonfarm payrolls to rise 245,000. The February figure was revised downward to 264,000 from 295,000, while the January figure was taken down to 201,000 from 239,000. There were 148.3 million Americans employed in March.

The hourly wage growth for March ticked up 2.1%, on an annualized basis, from a year ago. The number is still below the 3.5-4.0% range that economists consider as the normal wage growth rate for the U.S. Federal Reserve to start hiking benchmark interest rates. Wage pressures are building as the states and cities, as well as corporations such as McDonald's [NYSE:MCD] and Walmart [NYSE:WMT], are raising minimum wages. It could be a bad news if the “falling jobs and increasing hourly wage” trend continues.

The labor force participation rate dropped from 62.8% last month to 62.7%, meaning about 93.2 million Americans, aged 16 and older, still did not have a job or gave up looking for one, compared to 92.9 million in February, according to BLS data.

Ahead of the U.S. payrolls report, the Atlanta Federal Reserve's GDPNow model chopped the first quarter U.S. GDP growth from 1.9% to 0.1%. The indicator will probably have to be further revised downward after the weaker-than-expected March jobs report. The GDPNow model forecasts GDP growth by aggregating the 13 subcomponents that make up GDP with the chain-weighting methodology used by the U.S. Bureau of Economic Analysis. 

The soft durable goods orders report last week prompted blue-chip economists, such as JPMorgan economist Michael Feroli and Goldman Sachs economist Kris Dawson, to revise their estimates downward for first-quarter U.S. GDP to 1.5% and 1.8% from 2.0%, respectively. More downward revisions are expected in the coming weeks due to the disappointing jobs reports. The Bureau of Economic Analysis (BEA), the Commerce Department, will release the first-quarter GDP advance estimate on April 29.

The worst performing sector for the week was S&P 500 Healthcare. Biotech stocks, part of S&P 500 Healthcare, took a hit for the second week in a row due in part to a sector correction and in part to profit taking. SPDR S&P Biotech ETF [NYSE:XBI] tumbled 5.84% this week, but still manages to have a huge gain of 18.1% so far this year.

The best performing sectors for the week were S&P 500 Telecommunication services, Utilities and Energy, up from 1.65% to 1.45% for the week. Investors rotated their assets back to dividend paying sectors, including the Telecommunication services and Utilities sectors, which traditionally offer a 4.8% and 3.5% yield, respectively, as both sectors are considered to be “safe-haven” sectors in volatile markets.

As part of their strategies, hedge funds short high-flying sectors, such as biotechnology, and go long underperforming sectors, such as utilities and energy.

The S&P 500 Energy sector surged 1.45% for the week despite the U.S. Energy Information Administration (EIA) weekly report early Wednesday, showing that crude oil inventories had a build of 4.8 million barrels to a total of 471.4 million barrels, the highest since the EIA began keeping a weekly record. Analysts had expected a build of about 4.2 million barrels. 

Speculators ran up the crude oil price another 2.31% this week, in anticipation of a “no deal” on the Iran nuclear agreement. According to Reuters, Iran is storing at least 30 million barrels of oil in its fleet of supertankers, waiting for the Western sanctions to be lifted. If the Iran nuclear deal can be reached by June, there could be a surge in crude oil supply and more pressure on crude oil prices. Last week, the Yemen conflict was blamed as the reason for a 7.39% run-up in the crude price. 

From the technical viewpoint, the S&P 500 pullback to the major trendline support at 2,060 level, came after a batch of bad economic data. The S&P 500 has been moving in a symmetrical triangle pattern as the market can’t decide in what direction it will break. If the S&P decides to break to the downside, there are technical supports between 2,040 and 2,033 as well as at 2,020.

In the event that the S&P bounces off the lower trendline support of the symmetrical triangle and breaks out to the upside, the S&P could move higher towards our near-term projection target of 2,147. The head resistance levels between 2,115 and 2,120, however, need to be broken first.

The way that the market will respond on Monday is anybody’s guess, as the U.S. and European markets were closed on Friday due to the Good Friday holiday. 

S&P 500 Summary: +0.38% YTD as of 04/02/15
Barclay Hedge Fund Index: +2.94% YTD

Outperforming Sectors: Healthcare +5.08% YTD, Consumer discretionary +4.85% YTD, Telecommunication services +1.97% YTD, Consumer staples +1.05 YTD and Materials +0.64% YTD.

Underperforming Sectors: Information technology –0.34% YTD, Industrials –2.05% YTD, Financials –2.12% YTD, Energy –3.21% YTD and Utilities % –5.67% YTD.