The S&P 500 shrugged off the weak jobs report and focused more on the ISM non-manufacturing data, which showed that the U.S. non-manufacturing sector still continued expanding, but at a slightly slower pace last month. The highly anticipated Fed minutes showed divergence on the first rate hike and did not give much direction to the markets. Headline news, ranging from an acquisition in the healthcare sector to the reorganization of General Electric Co [NYSE:GE], helped to push the S&P 500 index above the 2,100 level to close at 2,102.06, up 1.7% for the week.

The Institute for Supply Management (ISM) said on Monday that its non-manufacturing index came in at 56.5% last month, from 56.9% in February, making the third straight drop and missing Wall Street's expectations of 56.9%. A reading over 50% indicates more companies are expanding. 

The ISM New Orders index, however, printed at 57.8%, 1.1% higher than the reading of 56.7% registered in February. Their Employment index saw an increase of 0.2% to 56.6%, below the February reading of 56.4%, still indicating growth for the 13th consecutive month, said the ISM.

The Fed minutes, which were released on Wednesday, didn’t show much except for the divergence among the Fed members on the appropriate timing of the first rate hike. Several Fed members said the central bank is likely to raise its benchmark interest rate in June, but "others" said the move will probably occur "later in the year". 

The currency and bond markets are signaling that the first rate hike might be coming as early as June. The U.S. Dollar index (DXY), a weighted geometric index of the value of the U.S. dollar relative to a basket of six major currencies, rose 1.72% for the fifth straight day to close at 99.35 on Friday, while the 10-year U.S. Treasury yield jumped 1.7% to close at 1.9526%. 

S&P 500 Healthcare, the third largest sector of the S&P 500 at about 14% weighted, surged 0.84% on Wednesday after UK-based Mylan NV [NASDAQ:MYL], a global company for branded generic and specialty pharmaceuticals, said that the company has offered to acquire Dublin, Ireland-based Perrigo Company PLC [NYSE:PRGO], a generic prescription pharmaceuticals and over-the-counter (OTC) pharmaceutical products manufacturer and distributor, for about U.S. $29 billion. 

If the deal is approved, the combined company will offer specialty pharmaceuticals, generic drugs, OTC treatments and nutritional products, with more than U.S. $15 billion in annual sales. Last month, AbbVie Inc [NYSE:ABBV] said that the company will acquire Pharmacyclics Inc [NASDAQ:PCYC] for about U.S. $21 billion, giving it access to the top-selling chronic lymphocytic leukemia (CLL) drug Imbruvica, and boost its peak annual sales of cancer drugs to over U.S. $15 billion in a few years.

According to U.K.-based Evaluate Ltd., there were more than 180 merger and acquisition (M&A) deals in the biotech and pharmaceutical spheres, totaling U.S. $212 billion last year.

The S&P 500 Industrials sector surged 1.41% after GE said on Friday that the company just wants to become a “simpler” industrial business and will shed most of its finance unit in the next two years. The company will return as much as U.S. $90 billion to its shareholders and will buy back as much as 1.94 billion shares, or about 19% of the shares outstanding. GE ranks No.5 by market weight, or about 1.7028%, in the S&P 500 index. 

The best performing sectors for the week were S&P 500 Industrials, Healthcare and Energy, up from 3.2% to 3.00% for the week. The S&P 500 Energy sector surged 3.00% for the week despite the U.S. Energy Information Administration (EIA) weekly report on Wednesday, showing that crude oil inventories had a build again of 10.9 million barrels to a total of 484.2 million barrels, the highest since the EIA began keeping a weekly record. Analysts had expected a build of about 3.25 million barrels.

Speculators ran up the crude oil price another 4.52% this week, blaming the shaky Iran nuclear framework deal and the widening conflict in Yemen. The Iran framework deal started to sound more and more like it doesn't exist as the U.S. said that sanctions on Iran will be phased out gradually, but Iranian officials want the Western sanctions on Iran to be lifted immediately after a final agreement is concluded. 

Currently, Iranian crude oil production is at about 3.2 million barrels per day, about 1 million barrels per day away from peak production. 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.

The Saudis are now asking the Pakistanis to join the fight against Yemen, while the U.S. sits on the sidelines and has no say, except supplying the Saudis with intelligence and advanced U.S.-made weaponry. Things could go south really quickly if the conflict spreads. Saudi Arabia’s crude oil production is at a current level of 9.64 million barrels per day, while Yemen’s crude oil production is at a level of just 160,000 barrels per day.

From the technical viewpoint, the S&P 500 successfully retested and bounced off the lower trendline support of the symmetrical triangle at the 2,060 level on Monday. The S&P 500 consolidated between the 50-SMA and 2080 level and then decided to breakout to the upside to retest the upper trendline resistance. In the symmetrical triangle breakout event, our near-term projection target of the S&P 500 is 2,147. The head resistance levels between 2,115 and 2,120, however, need to be broken first.

The headwinds for the S&P 500 are the strong dollar and rising bond yields. One should be aware that the DXY just broke out to the upside, while the 10-year U.S. Treasury yield could climb over 2% in the next few weeks as Fed members, Lacker and Fisher, repeated their views of the “strong” case for a June rate hike.

S&P 500 Summary: +2.1% YTD as of 04/10/15
Barclay Hedge Fund Index: +2.65% YTD as of 04/10/15

Outperforming Sectors: Healthcare +8.12% YTD, Consumer discretionary +6.19% YTD, and Materials +2.14% YTD. 

Underperforming Sectors: Consumer staples +2.00% YTD, Information technology +1.54% YTD, Telecommunication services +1.32% YTD, Industrials +1.16% YTD, Energy –0.21% YTD, Financials –2.0% YTD, and Utilities –5.49% YTD.