U.S. Equities Pull Back Ahead of Jobs Report

[Excerpted from Bill Cara's Daily Report]

US equity prices pulled back slightly again Thursday, but closed off their lows with another late-session buying spurt. Noteworthy was the fact that the S&P 500 hit a 2009 high of 1008.0 within a few minutes of the open and then sold off during the day due to consumer spending concerns and a focus on Friday’s national employment report.

At the closing bell, the S&P 500 (997.08 -5.64 -0.56%), the DJIA (9,256.26 -24.71 -0.27%) and the NASDAQ Composite (1,973.16 -19.89 -1.00%) all ended lower, but fractionally off 2009 highs.

The leading and only rising industry group was Retailers ($RLX +1.1%). With pressure on this sector coming from giants Target (TGT), Costco (COST) and Wal-Mart (WMT), a number of positive media articles surfaced, which lifted several others like The Limited (LTD +13.0%), The Gap (GPS +8.2%), Urban Outfitters (URBN +7.0%), Bon-Ton (BONT +5.8%), and Macy’s (M +5.6%). For The Limited, for example, same store sales dropped -7% and analysts said they had expected a decline of -12%, hence the stock lifted +13.0% within a couple minutes of the open. This is the type of trading that has been going on that makes amateur and professional traders alike very nervous.

Hospitals ($RXH -4.8%) was the worst performing industry group.

For Cara 100 company stocks, the leading winners were the Chinese telecoms, China Mobile and China Telecom (CHL +7.7% CHA +4.8%), which along with non-Cara 100 China Unicom (CHU +6.4%), soared despite a lack of news and a faltering Shanghai Composite. Boeing (BA +3.4%) was also up. Boeing’s 787 Dreamliner chief engineer opined Thursday that the plane is "just weeks away from" announcing a new delivery schedule.

Ahead of Friday’s US Employment Report, the US Dollar regained some strength (78.00 +0.44 +0.57%). Against the stronger Dollar was the weaker Yen (104.75 -0.61 -0.58%), Euro (143.48 -0.61 -0.42%), Pound (167.82 -2.04 -1.20%) and Canadian Loonie (92.76 -0.66 -0.71%).

Commodity prices were mixed. Crude Oil (WTIC 72.02 +0.05 +0.07%) and $GOLD (963.30 -0.50 -0.05%) barely moved, however.

The US long bond ($USB 116.47 +0.38 +0.32%) was strong after three straight down days this week. Treasury yields for the 30-year (4.517 -0.44 -0.96%), 10-year (3.746 -0.18 -0.48%) and the 5-year (2.711 -0.24 -0.88%) instruments dropped. The Treasury bill yield (0.170 -0.05 -2.86%) dropped a tad.

Earlier Friday, Austral-Asian markets closed sharply down except for Japan’s Nikkei 225 (10,412.1 +0.23%), which lifted. Hong Kong (20,375.4 -2.51%), Shanghai (3,260.7 -2.85%), Australia (4,303.10 -0.64%) and India (15,160.2 -2.28%) were down on the session.

The European bourses were also weaker earlier Friday, following the negative Royal Bank of Scotland report: the French CAC (3,443.0 6:52AM ET -1.00%), German DAX (5,331.7 6:37AM ET -0.71%) and FTSE 100 (4,638.7 6:37AM ET -1.10%) were all down about -1.0%, pulled down by RBS, Lloyds, Barclays and HSBC.

In the spot (cash) market this morning, the price of gold, palladium, platinum and silver were quiet: (960.11 -1.30 -0.14% 06:56am ET); (268 +1 +0.37% 06:48am ET); (1238 -11 -0.88% 06:48am ET); and (14.63 +0.08 +0.55% 06:56am ET), respectively.

Euro:Dollar futures were a bit firmer earlier Friday (1.4364 +0.0021 +0.15% 06:42am ET).

Sept Crude is a bit weaker (71.35 -0.59 -0.82% 06:42am ET).

US equity market futures were down a bit (9203 -26 -0.28% 06:42am ET).