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NYSE MAC DESK MID-DAY MARKET UPDATE:

DOW 16,502 (-70 points), S&P500 1875 (-13 handles), Brent Crude $106.85/barrel (+$0.70), Gold $1,304.70/oz. (+$20.30)

MARKET DRIVERS: (Stocks are trading modestly lower following this morning’s March payroll report as traders look to take some profits off the table heading into the weekend.)

• It’s Jobs Day: Nonfarm payrolls increased by a seasonally adjusted 192,000 in March; coming in slightly below consensus. In addition, January and February payrolls were revised up by a combined 37,000; and the nation’s unemployment rate held steady at 6.7% as more people found work and more people joined the labor force.
• German manufacturing orders climbed 0.6% in February, above the expected unchanged reading for the month, on strong domestic demand. The data adds to indications that economic growth is beginning to gain speed.
• The IPO parade continues; with three new IPOs opening on the NYSE floor this morning:
a) Online food delivery service GrubHub (GRUB) priced 7.4 million shares - more than expected - at $26, above the $23 to $25 range. The stock opened at $40/share!
b) IMS Health (IMS), a healthcare data and consulting services provider, priced 65 million shares at $20, in the middle of the $18 to $21 range. The stock opened at $22.18.
c) Opower (OPWR), which provides cloud based software to the utility industry, priced 6.1 million shares at $19, at the high end of the $17 to $19 range. The stock opened at $25…

• Tech the worst performer with the S&P Information Technology Index (1.5%)
o Internet space underperforming with the QNET (2.3%), continuing its move lower from yesterday when it fell ~2.5%. P (4.3%), NFLX (3.8%), SINA (3.2%), GOOG (3.1%) and AKAM (3%) the laggards. P continuing its sell-off from yesterday, when it fell >5% after releasing March audience metrics. OPEN +1% and ADS +0.6% the notable outperformers. The former continuing its move higher from yesterday after it was upgraded at Citi.
o Semis underperforming with the SOX (1.2%). Space still outperforming this week, with the index up ~1.9%. RBCN (5.3%), ATML (3.9%) and TQNT (3.4%) leading the way lower today. SNDK +0.8%, AMD +0.8% and MRVL +0.8% topping gains.
o Software underperforming. BLOX (3.5%), JIVE (2.5%), TIBX (2.5%), FTNT (2.2%) the notable performers to the downside. SYMC +0.2% and SAP +0.2% the only notable gainers.
o Other notable performers: CIEN (3.5%), NTAP +0.8%. Pacific Crest was positive on NTAP following meetings with management, citing strong y/y growth in new customer design wins and the company’s new ONTAP software.

• Consumer discretionary underperforming with the S&P Consumer Discretionary Index (0.8%)
o Retail underperforming with the S&P Retail Index (1%). AMZN (3.2%) the laggard today. Recall the stock fell ~2.4% yesterday as well, now down >19% ytd. A few analysts have said Amazon’s Fire TV is underwhelming. Apparel space outperforming, led higher by ANN +3%, CHS +1.4% and ARO +1%. ANN was upgraded at Macquarie, which believes the stake held by Golden Gate Capital increases the probability that the company will either aggressively buyback shares or explore strategic alternatives. BONT +2.6% leading the department stores to the upside. CE space mixed. GME (1%) despite and upgrade at BofA-ML, citing improved risk/reward. BBY +2.5% the notable gainer. BBBY +1% the notable performer among the housing-related names.
o Restaurants underperforming. SONC (2.3%) the laggard following a downgrade at Buckingham. BWLD (1.6%) and DPZ (1.4%) the other notable decliners. THI +1.1% and DRI +0.5% outperforming.
o OTAs led lower by TRIP (3.7%), PCLN (2.6%) and OWW (2.5%).
o Homebuilders topping gains with the XHB +0.7%. Note Bloomberg ran an article pointing out the increased bullishness in the space amid prospects for a spring recovery in the housing market following a harsh winter. Cost of call options on the index the highest relative to puts in 2 1/2 years. HOV +2.9%, BZH +2.3%, and RYL +2.2% the notable gainers.
o Other notable performers: NTRI (5.2%), AHC (4.1%), DECK +3%

• Financials relatively outperforming with the S&P Financials Index (0.3%)
o Online brokers continuing their move lower from yesterday amid concerns about rebate payments to brokers from exchanges to attract business and increased attention towards high-frequency trading following Charles Schwab’s comments that it is a “growing cancer that needs to be addressed”. ETFC (6.6%), SCHW (3.6%) and AMTD (3.6%). Recall ETFC and AMTD both fell >5% yesterday as well.
o Credit card processors underperforming, with V (2.9%) and MA (2%).
o Banks lower with the BKX (0.4%). Rally in Treasuries following this morning’s payroll report cited as a headwind. The WSJ ran an article pointing out the weak earnings expectations for Q1 in the space. C (1%) and BAC (0.7%) leading the money-center space lower. Investment banks holding up better, with GS (0.3%) and MS (0.3%). Regionals underperforming with the KRX (1.5%). SNV (1.7%) the notable decliner. WFC +0.1% outperforming.

• Industrials outperforming with the S&P Industrials Index (0.2%)
o Building materials broadly higher. M&A speculation probably helping the space, after Holcim confirmed it is in talks with Lafarge to merge. Note Bloomberg ran an article pointing out bullish sentiment for the group. CX +5.3% leading while EXP +3.2%, MLM +2.5% and TXI +2.2% outperform as well.
o Machinery mixed. JOY +1.1% outperforming, while CR (1.2%), PCAR (1.1%) and TEX (0.8%) lag. Ag machinery higher with AGCO +1.6% and DE +0.3%.
o Multis mixed. ITW +1.2% outperforming. Note the EU cleared Carlyle Group’s acquisition of ITW’s industrial packaging unit. MSM +1.1% and FAST +0.7% also outperforming. ATU (1.6%), WBC (1.5%) and SPW (1.4%) underperforming.
o Transports mixed. Airlines underperforming, giving back some of this week’s outperformance. HA (4.1%), UAL (3.1%) and SKYW (2.4%) lagging. Trucking broadly lower with YRCW (3.3%) and ABFS (1.9%) notable laggards.

• Energy outperforming with the S&P Energy Index +0.2%
o Brent Crude rising for a second day, trading up $0.70 at $106.85/barrel. Natural gas (0.7%).
o Majors outperforming. BP +0.9% and XOM +0.6% leading the way higher, while OXY (1.5%) underperforms.
o Coal rallying. BTU +3.1% upgraded at Cowen. ACI +5.8%, ANR +5.2% and WLT +4.2% other notable outperformers. JRCC (1.7%) lagging.
o E&Ps mixed with the EPX (0.1%). APC +1.1% yesterday announced settlement with US government on liabilities in TROX case; subsequently upgraded at JPMorgan and target increased at Credit Suisse and Bernstein. SYRG +4.2% reported well-received Q2 earnings. UPL +2.6% and WLL +1.9% also outperforming. TAT (1.6%) reported Q1 production below consensus. KWK (1.8%) and COG (1.7%) also underperforming.
o Refiners underperforming, with WNR (2.1%), VLO (1.3%) and TSO (1.2%) leading the way. MUR +0.8% the notable performer to the upside.

• Utilities the best performer with the S&P Utilities Index +1.5%
o Space leading the way today with a decline in interest rates cited as a tailwind. EXC +2.7%, PEG +2.3%, ETR +2.2%, AES +2.2%, PCG +2.1% and TEG +1.8% the notable performers. PPL +1.2% relatively underperforming following a downgrade at Macquarie, which wouldn’t embed any further benefit related to potential M&A activities around PPL supply.