Stocks were seeking direction on Thursday as jitters about Friday’s jobs report seemed to outweighed bullish news from the financials.
Wall Street initially rose after Bank of America surprised investors with its plans to repay TARP money.
After the bell Wednesday, BofA announced the plans which include selling up to $18.8 billion in securities that will convert into common stock once shareholders approve an increase in its share count. The remainder of the $45 billion would be repaid through $26.2 billion in cash.
However the market pared gains as investors digested new data showing the U.S. services sector shrank unexpectedly in November.
What should you be watching?
I’m keeping an eye on bank stocks - I have not been a big fan of financials, says Patty Edwards of Storehouse. Specifically, I’m watching Goldman Sachs which is the canary in the coal mine. And it looks like it’s breaking support. I would not step in.
I also think the action in Goldman could be a potential warning sign, adds Guy Adami. It was the catalyst on the way up and Goldman could be the catalyst on the way down. Couple that with Apple, which is also a bellwether and also not trading well, and the market could be trying to tell us something.
I’m watching the jobs report, due out Friday, adds Mike Gurka of Empower. The market is looking for a reason for stocks to be at their current levels and I think the jobs data will disappoint. But all the recent M&A activity makes me bullish longer-term and I’d be a buyer of stocks on Friday, on any dip.
Options action suggests to me that investors are now waiting for Wells Fargo to do something similar to BofA, reveals OptionMonster Jon Najarian. However Wells has said in the past they won’t have to go to the public markets to repay the TARP.