Nasdaq, S&P 500 See Cautious Gains Ahead of Friday's NFPs and Easter Break: Analyst Warns Of Challenging April, Q2 Before Good Times Return

The U.S. stock market marginally rebounded midday Thursday ahead of the Good Friday market holiday, which coincides with the publication of the March's nonfarm payrolls data. On the macro front, initial unemployment claims came in at 228,000, above predictions of 200,000, bolstering perceptions of slowing momentum in the economy. Low volumes, which are common in the pre-holiday period, characterized today's session.

Cues From Thursday's Trading:

The S&P 500 index reclaimed 4,100 points, up 0.4% on the day. The Dow Jones Industrial Average was flat, while both the Nasdaq 100 and the Russell 2000 index gained 0.6%. 

Analyst Color:

The economy and the market had a fairly good first quarter although the good times may not continue into the second quarter, according to Brad McMillan, chief investment officer at Commonwealth Financial Network.

“April and the second quarter will likely be more challenging,” the economist said. “But even if they are, the prospects for the rest of the year continue to look positive,” he added.

Thursday's Trading In Major US Equity ETFs: 

In midday trading Thursday, the SPDR S&P 500 ETF Trust SPY was up 0.36% to $409.07, the SPDR Dow Jones Industrial Average ETF DIA edged 0.1% higher to $335.25 and the Invesco QQQ Trust QQQ rose 0.6% to $317.71, according to Benzinga Pro data.

Among U.S. equity sectors, the Communication Services Select Sector SPDR Fund XLC slightly outperformed, up 0.8%. The Financial Select Sector SPDR Fund XLF saw gains of 0.5%. 

The Energy Select Sector SPDR Fund XLE underperformed, down 0.8%, followed by the Materials Select Sector SPDR Fund XLB, down 0.3%. 

Latest Economic Data:

• The U.S. Department of Labor announced the number of Americans registering for jobless benefits declined by 18,000 to 228,000 in the week ending April 1, above the 200,000 predicted. The prior week's data was revised up from 196,000 to to 248,000, reflecting a modification in the Department of Labor's methodology
• St. Louis Federal Reserve President James Bullard said he doesn’t see risk that a drop in bank lending will cause a recession and said the Fed should continue on its rate hiking path. In terms of inflation, he Bullard said it is leveling out, but he wants to see a definite decreasing trend.

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Stocks In Focus:

• Lumentum Holdings LITE fell 10% following the company’s first-quarter preannouncement. UBS, Raymond James and Goldman Sachs lowered the company's price target. 
• Costco Wholesale Corp. COST fell about 2% after its March sales disappointed investors.
• Lamb Weston Holdings, Inc. LW rose by nearly 3%, after it beated earning and revenue expectations last quarter. 
• Constellation Brands, Inc. STZ rose 1.3% reported better-than-expected earnings, but slightly weaker revenues.  
• Levi Strauss & Co. LEVI plummeted 15%, despite beating earnings expectations, as CFO Harmit Singh said fiscal second-quarter revenue is expected to fall in the high single digits to low double digits as demand from value-oriented shoppers softens.
• WD-40 Company WDFC will report after the market close.

Top Analysts’ Call

• FedEx Corp. FDX: Raymond James upgrades from Market Perform to Outperform with $285 price target
• Lumentum: Rosenblatt downgrades from Buy to Neutral and lowers price target from $77 to $48
• Skyworks Solutions, Inc. SWKS: Stifel initiates with a Buy rating and $150 price target
• Qorvo, Inc. QRVO: Stifel initiates with a Neutral rating and $110 price target
• Janus Henderson Group plc JHG: Citigroup upgrades from Sell to Neutral. 

Commodities, Bonds, Forex, And Other Global Equity Markets:

Crude oil held steady, with a barrel of WTI-grade crude trading at $80. The United States Oil Fund ETF USO was flat at $70.20 per share.  

Treasury yields extended their drop, with the yield on the 10-year Treasury Note down 4 basis points to 3.27%, the lowest since early September 2022. The yield on the two-year yield Treasury Note was flat at 3.78%. The iShares 20+ Year Treasury Bond ETF TLT was 0.5% higher on the day. 

The dollar was unchanged, with the U.S. dollar index up by a shy 0.1%. 

European equity indices all closed in the green. The iShares MSCI Eurozone ETF EZU was 0.9% higher. 

Gold dipped by 0.5% to $2,011/oz. The SPDR Gold Trust GLD was 0.5% lower at $186.94. Silver edged 0.3% higher to $24.95, with the iShares Silver Trust SLV flat at $22.93 per share. Bitcoin fell 0.5% to $28,073.

Read next: Friday's Jobs Data Likely To Shift Market Odds For Fed's Next Interest Rate Decision: Are Help Wanted Signs Gone?

Staff writer Piero Cingari updated this report midday Thursday.