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From Briefing.com: 10:33 am Weekly Wrap

The Dow and S&P 500 posted solid gains in relatively subdued and low volume trading during the holiday-shortened week.

The Nasdaq, however, settled with a modest gain as some large-cap technology issues underperformed. Research In Motion (RIMM) was a main laggard, shedding 8.8%, after posting earnings that missed Wall Street's expectations.

Eight of the ten sectors gained, led by energy (+3.8%), materials (+2.4%) and utilities (+2.0%). The two lagging sectors were consumer discretionary (unchanged) and technology (unchanged).

But Apple (AAPL) had a solid showing for the week, climbing 2.2%, amid reports it is working on a new iPhone that may be available on carriers other than AT&T (T).

The gains within the energy sector were aided by a strong advance in crude oil prices (6.3%) and word that President Obama is proposing to allow some new offshore drilling. Commodities as a whole rose 3.4% as the dollar fell 1.3%.

Separately, the Federal Reserve completed its $1.25 trln in MBS purchases. Though there was some volatility, rates saw relatively limited movement as this was known well in advance. In addition, the Fed currently has a "buy-and-hold" stance, meaning it will continue to own roughly 25% of the agency MBS market.

Economic news had a relatively limited impact on trade.

Consumption expenditures in February increased 0.3%, as expected, while core personal consumption expenditures were flat, which was not too much of a surprise since the consensus had called for a tepid 0.1% increase. Total and disposable income posted no growth in February -- a 0.1% increase had been expected.

March Consumer Confidence rebounded to 52.5 from 46.4, topping the 51.0 consensus. Part of the gain is likely due to the solid 6.1% gain in the S&P 500 during March.

The ISM Manufacturing Index for March came in at 59.6, which exceeded expectations (57.0) and marked the best reading in more than five years.

The labor market was in focus. Weekly initial jobless claims met expectations at 440,000. The ADP private payroll report on Wednesday showed an unexpected decline, shedding 23,000 versus the consensus that called for a gain of 40,000. Though the drop is a negative for the labor market outlook, this report has not always correlated with the official government report.

The stock market was closed Friday in recognition of Good Friday. The March employment report, however, was still released at 8:30ET.

On the bright side, nonfarm payrolls increased by 162,000 positions (consensus 184,000) in March. The prior two months saw upward revisions. January was revised from -26,000 to +14,000 while February was revised from -36,000 to -14,000. Temporary help services increased 40,000 in March.

Temporary employment, which is seen as a leading indicator, has increased by 313,000 since September.

The average workweek for all employees on private nonfarm payrolls picked up to 34.0 hours (consensus 33.9) from an upwardly revised 33.9 hours in February. In turn, the manufacturing workweek increased 0.2 to 39.9 hours and factory overtime was up 0.1 hour over the month to 2.9 hours.

The uptick in the average workweek will also be held out as another marker that suggests hiring activity should pick up in coming months.

The unemployment rate held steady at 9.7% (consensus 9.7%). On the not-so-bright-side, average hourly earnings declined -0.1% (consensus +0.2%) in March after a 0.2% increase in February, which was revised up from an originally reported increase of 0.1%.

On a year-over-year basis, average hourly earnings have risen 1.8%, which means they are actually up only 0.5% on a real basis using core CPI, which was up 1.3% year-over-year in February, as the deflator. The limited income growth will continue to act as a restraint on consumer spending.

Another very bothersome number is the number of long-term unemployed. That number stretched to 6.5 mln in March from 6.1 mln in February. The translation is that 44.1% of all workers officially counted as unemployed have been out of work 27 weeks or longer. That compares to 24.6% a year ago.

The so-called "real" unemployment rate, which counts the total unemployed plus all marginally attached workers and the total employed part-time for economic reasons, edged up to 16.9% from 16.8%. Essentially, this means one out of every six workers over the age of 16 is still either unemployed or underemployed.

The futures market moved up after the data, but we wouldn't put a lot of stock in the futures indication given the thin conditions.

In any event, the stock market has been inclined to look at the silver lining with most reports these days. Come Monday we will see if that remains the case.

The March employment report had some silver linings, but it is still hard not to notice the dark clouds of meager earnings growth and the inability to find full-time work.

 
 Index 	 Started Week 	Ended Week    Change % Change 	YTD 
 DJIA 	   10850.36 	10927.07       76.71 	0.7 % 	4.8 % 
 Nasdaq 	    2395.13 	 2402.58 	7.45 	0.3 % 	5.9 % 
 S&P 500     1166.59 	  1178.1       11.51 	1.0 % 	5.6 % 
 Russell 2000 678.97 	  683.98 	5.01 	0.7 % 	9.4 %

4:35 pm : Early support sent the stock market to a fractionally improved 52-week high, but as buyers backed away and sellers squared their positions ahead of tomorrow's official jobs report stocks succumbed to pressure. Stocks bounced in the final hour to close the session on a strong note, though.

News of a pleasing eurozone PMI and a restated commitment by China to loose monetary policy was cited as a reason for the positive mood among market participants in the early going. A less obvious cause for the early gains is that fund money was put to work with the start of the second quarter.

The best ISM Manufacturing Index reading in five years gave reason to push stocks even higher. At 59.6, the index also exceeded expectations of many economists.

Other economic data had less of an affect on the morning mood. News that construction spending for February a sharper-than-expected 1.3% received little mention, while an initial jobless claims count of 439,000 for the week ended Mar. 27 was shrugged off since it was in-line with the consensus forecast.

The weekly jobless claims count precedes the government's official payrolls report, which is due tomorrow morning. The report's release always makes for a widely-watched event, but the stock market will be closed in observance of Good Friday.

Given that the stock market will be closed tomorrow and the jobs report possesses a degree of uncertainty, many market participants were compelled to square their bets. That gave way to some selling and, in turn, an afternoon slide, which was likely exacerbated by the light trading volume ahead of the holiday weekend.

Of the major indices, the Nasdaq made the sharpest slide as it fell from a 1% gain all the way into negative territory. Research In Motion (RIMM 68.52, -5.45) was a primary source of weakness after disappointment over its earnings led to a downgrade by analysts at Goldman Sachs.

A late flurry of buying helped stocks rebound into the close. Though the stock market was unable to return to the fractionally improved 52-week highs that it set in the early going, it still finished the week on a strong note with broad-based gains.

As such, all 10 major sectors finished in positive ground. Materials gained the most made as they ascended 1.8%. Support for the sector was helped by a 0.5% loss in the Dollar Index.

The dollar's decline also lifted commodity prices, which hiked the CRB Commodity Index to a 1.1% gain. Natural gas was the biggest gainer among commodities; contract prices had been down roughly 1% in the morning, but news of a smaller-than-expected inventory build sent prices up 5.7% to $4.09 per MMBtu.

Advancing Sectors: Materials (+1.8%), Energy (+1.6%), Utilities (+1.3%), Telecom (+1.0%), Financials (+0.9%), Consumer Discretionary (+0.7%), Industrials (+0.6%), Health Care (+0.6%), Consumer Staples (+0.5%), Tech (+0.1%)
Declining Sectors: (None) DJ30 +70.44 NASDAQ +4.62 NQ100 +0.1% R2K +0.8% SP400 +0.9% SP500 +8.67 NASDAQ Adv/Vol/Dec 1512/2.28 bln/1146 NYSE Adv/Vol/Dec 2270/914 mln/769

4:05PM Cray awarded $45 mln supercomputer contract from the National Nuclear Security Administration (CRAY) 5.99 +0.04 : Co announced that it has signed a sub-contract with Los Alamos National Security, LLC to provide the National Nuclear Security Administration with a next-generation Cray supercomputer. Currently valued at more than $45 mln, the multi-year, multi-phase contract can be expanded if the NNSA exercises an option for a future upgrade. The new system will create a new supercomputing platform, named Cielo, for the Advanced Simulation and Computing program at the NNSA.

Research in Motion (RIMM 73.97 -0.95) reported Q4 (Feb) earnings of $1.27 per share, $0.01 worse than the Thomson Reuters consensus of $1.28; revenues rose 17.9% year/year to $4.08 bln vs the $4.31 bln consensus. Gross margin for the fourth quarter was 45.7% compared to 42.7% in the prior quarter. Reports Q4 net subscriber account additions of 4.9 mln vs guidance of 4.4-4.7 mln; ships 10.5 mln units in Q4 vs guidance of 10.6-11.2 mln and Street est of ~11 mln. Company issued upside EPS guidance for Q1, in-line rev guidance. Sees Q1 EPS of $1.31-1.38 vs. $1.22 Thomson Reuters consensus; sees Q1 revs of $4.25-4.45 bln vs. $4.33 bln Thomson Reuters consensus.

XYRATEX (XRTX 16.93 +0.27) reported Q1 (Feb) earnings of $0.96 per share, $0.18 better than the Thomson Reuters consensus of $0.78; revenues rose 73.5% year/year to $319 mln vs the $309.7 mln consensus. Company issued upside guidance for Q2, sees EPS of $1.10-$1.63 vs. $0.76 Thomson Reuters consensus; sees Q2 revs of $400-$460 mln vs. $329.85 mln Thomson Reuters consensus.

Wall Street Journal reported with a new version of the iPhone in the works, the clock is ticking for AT&T (T 25.84 -0.11) to get its much-criticized network ready for the looming battle. The carrier has taken a beating from consumers who have complained about poor coverage in major cities including New York and San Francisco. Now, AT&T is racing to reduce its dropped calls and speed up Web-surfing before Apple (AAPL 235.00 -0.85) releases a new version of the iPhone that could run on Verizon Wireless's (VZ 31.02 -0.21) network.

Kaufman noted that at a press and analyst event yesterday, Intel (INTC 22.29 -0.05) launched the Xeon 7500 Nehalem-EX processor (also Xeon 6500), which supports up to 8 cores. Firm believes this announcement caps a string of product releases that represents a significant strengthening of the company's server processor product family. While INTC's existing Nehalem server products have driven strong upgrade momentum in the 2-way mainstream processor market, the company believes that as many as 1 million servers have had a delayed refresh cycle due to the economic downturn.

Associated Press reported that LM Ericsson (ERIC 10.44 +0.21) said it has received a deal worth $1.3 billion from India's largest telecommunications operator, Bharti Airtel, to expand and upgrade its networks. Ericsson says the expansion will help Airtel to put a converged network into place and expand its coverage in rural India. The contract covers Airtel networks in 15 of 22 telecom circles and will result in better voice quality and faster data access for users.