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.
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GOLD RECORD
Gold hit record highs over $1,225 an ounce on Thursday as the precious metal continued to attract investors looking for an alternative to the dollar.
What’s the trade?
The slope is steep in gold, muses Mike Gurka. I wouldn’t be surprised to see a slight reversal.
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SALES DATA KNOCKS RETAILERS
The XRT traded lower on Thursday after new data showed retailers from Macy's to Costco posted much weaker-than-expected sales for November as shoppers focused only on big bargains at the start of the key holiday selling season.
The Thomson Reuters same-store sales index rose 0.5 percent for the month, falling far short of Wall Street expectations for a 2.1 percent increase.
What’s the retail trade?
The results were horrible, says Patty Edwards. This proves that retailers were not sandbagging when they said last month that consumers really are not strong. Select names, however, are standouts. I’m impressed by Kohl’s and Ross Stores, says Edwards. There are some good things in the space but a lot is ugly.
If you believe the broader market is going down Walmart might be the place to be, says Guy Adami.
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COMCAST, GE STRIKE NBCU DEAL
On Thursday, General Electric and Comcast announced an agreement that stands as one of the biggest deals in media history.
In a deal valued around $30 billion, Comcast, the largest cable TV operator in the US, will end up controlling 51 percent of a newly-formed NBCU, while GE will own 49 percent.
The transaction could take more than a year to close as the companies await approval from the Federal Communications Commission.
What’s the trade?
I’d put Cablevision on your radar, says Guy Adami. On the back of the Comcast deal CVC may be a takeover target.
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CALL THE CLOSE
Jon Najarian: I’m getting short into the close, selectively.
Guy Adami: I’m with Jon Najarian.
Mike Gurka: I’d be a buyer on any dip generated by the jobs number, Friday.
Patricia Edwards: I’m on the sidelines unless I see 1211 on the S&P.
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Trader disclosure: On December 3rd, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (AAPL) Call Spread; Najarian Owns ((BAC) Call Spread; Najarian Owns (INTC) & Short (INTC) Calls; Najarian Owns (DELL) Calls; Najarian Owns (TJX); Najarian Owns (TXN); Najarian Owns (FCX) Call Spread; Najarian Owns (INTC) & (INTC) Calls; Najarian Owns (UAUA) Call Spread
For Dennis Gartman
Funds Managed By Dennis Gartman Own (AAPL)
Funds Managed By Dennis Gartman Own (FCX)
Funds Managed By Dennis Gartman Owns (GLD)
Funds Managed By Dennis Gartman Are Short (GS)
Funds Managed By Dennis Gartman Are SHort (JCP)
Fund Managed By Dennis Gartman Own Gold
For Jeff Harte
Sandler O'Neill Expects To Receive Compensation From (BAC)
(BAC) Is A Client of Sandler O'Neill
Sandler O'Neill Has Received Compensation From (C)
Sandler O'Neill Expects To Receive Compensation From (GS)
(GS) is A Client of Sandler O'Neill
Sandler O'Neill Has Received Compensation From (JPM)
(JPM) is A Client of Sandler O'Neill
Sandler O'Neill Has Received Compensation From (MS)
(MS) is A Client of Sandler O'Neill
CNBC.com with wires