Recapping the day's news and newsmakers through the lens of CNBC.
Jobless Numbers OK, but Wait 'Til Friday
New unemployment claims fell last week pointing to job growth amid a slowing economy.
Initial claims for state jobless benefits came in at 346,000, down 11,000 from the previous week, according to the Labor Department. Claims usually fall on the Memorial Day holiday week, so while the numbers aren't bad, they also aren't anything to get excited about.
Unemployment is holding steady at about 7.5 percent, its lowest point in 4½ years, but still too high for comfort. So while it's good news that private employers are creating new jobs at a steady pace, it's bad news that it's a painfully slow pace.
Friday's big jobs report should serve as a bellwether for the economy and also provide a clue as to when the Federal Reserve might begin tapering its bond buying program. Speculation has the number coming in at a relatively neutral 160,000, which is what investors want.
"Overall, the indicators have been weak, and that includes thinking about the challenge you have with the ISM manufacturing and service number—both suggest expansion but that has decelerated. I think people forget one thing, which is that economic growth is weaker in this quarter than it was in the prior quarter. We're talking about 1.5 versus 2.5 percent. The Fed, you could say, is neutral to the extent that it is doing the same QE that it did last month. But the Fed would argue that every time that it adds to its balance sheet and takes duration off the market it's more stimulus."—CNBC's Steve Liesman
"I think they probably want to see a bit of a neutral number in the context of160 or 180. If the headline number is good, what is the average workweek? There is a concern that people are being taken off full-time employment and put on temporary employment because of the health care act coming up."—Art Cashin, UBS director of NYSE floor operations
The Buck Stops Here
The love affair between the stock market and dollar appears to be heading for the rocks.
The two have moved in tandem, breaking a pattern that had been prevalent since the Federal Reserve began its aggressive easing measures that helped keep the U.S. currency weak against its global trading partners and equity markets strong.
But with expectations dimming that the Fed is planning an early exit, the dollar likely will lose some of its momentum as the central bank maintains its low interest rate posture and quantitative easing program.
Thursday saw the dollar collapse versus the yen by a whopping 3 percent. The reason is jitters before Friday's jobs report.
"We're seeing a massive positional unwind. The market, in general, has seen a nice rally in the dollar since [Fed Chairman Ben] Bernanke spoke to Congress and the market had been expecting tapering of quantitative easing. But suddenly, the market said, 'What if the number tomorrow is around 150,000 and it gives reason to pause?' That's caused a huge positional unwind and it's exacerbated by massive illiquidity in currency markets."—Paul Richards, head of FX distribution-Americas, UBS
Can You Hear Us Now?
So the good news for Verizon customers is that the National Security Agency isn't listening in on your phone calls and won't be able to see who you're calling. But fans of George Orwell still won't like to know that the "metadata" of those phone calls, such as the length, location and time of a call as well as numbers called, will be recorded.
That's the upshot of a secret court order granted to the FBI in April by the Foreign Intelligence Surveillance Court. Proponents say that Big Brother's order helps them fight terrorism. The government has until July 19 to collect data. Whether the order applies or will apply to other carriers, such as AT&T or Sprint, is unclear.
"It's been a critical tool in protecting the nation from terrorism and it allows counterterrorism personnel to discover the contacts of people suspected of being involved in terroristic activities who they're talking to overseas, then who they're talking to here in the United States."—CNBC's Eamon Javers
Did Warren Buffett spill the beans on his planned successor for the helm of Berkshire Hathaway when speaking at the Forbes 400 Summit on Philanthropy in New York on Wednesday? Under repeated questioning from investors and the press, Buffett has only ever said that the Berkshire board has a sealed envelope with the name inside of whom he would like to succeed him.
"I've been trying to keep it very quiet. I've never even told the board of directors. Bill Gates is here; he's on the board. I've carried this envelope around that has the name inside it. Bill slipped it out and opened it up, and looked to the board and said 'check my pulse again.'"—Warren Buffett
The June Swoon
Even with markets bouncing back slightly on Thursday after a two-day swoon, market watchers are worried about widening cracks in the rally, especially with Friday's big jobs report looming.
Housing, financials, transportation and utilities, which have propelled the market, are all down since May 22. And other sectors, such as pharma, food and biotech, were hit. Even Coca-Cola and Boeing have suffered.
Of course, with every pessimist comes an opportunist. As shares fall, buying opportunities develop (especially as bonds and cash remain unattractive). We may not have seen the 5 percent pullback that some are saying would motivate them to buy, but if the June swoon continues, we might not be far off.
"To some it means the rally is showing some serious cracks especially in the pillars that have supported one of the strongest bull markets in recent memory. It's just not a pretty picture. Is bad news going to be good news for stocks or are we just in for some continued days ahead of pain? Is this the start of the correction or is this going to prove to be a buying opportunity? All those questions are likely going to be answered in the next 24 hours."—CNBC's Scott Wapner
"We heard a lot of people talking about, 'is this the beginning of the long-awaited correction?' The destruction that's already happened is just amazing. That makes no sense at all. The question is, are we at the beginning of a pause in the correction or a real bounce?"—CNBC's Jim Cramer
"We're finding with our clients that they are looking for opportunities to put money to work and if this little June swoon continues, I think this could be a good time to put some of that cash back into the market."—Tom Anderson, CIO at Boston Private Bank & Trust
_By Doug Cubberley, Special to CNBC.com