Expect Muted Action Ahead of Friday's Jobs Report

Plus, taking in the Talking Feds.
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Yesterday's late-day

recovery looks like it will extend into this morning, but with many investors staying out of the market ahead of tomorrow morning's

jobs report, stocks look like they'll be locked in a pretty tight channel.

"Yesterday was kind of a trading-range day and today again probably will be," said Todd Clark, head of listed trading at

Charles Schwab

. Clark noted that yesterday the

S&P 500

futures bounced near 1280 -- the fourth time they've done that in a little over a week. The catch is that the upside is pretty limited -- past 1300 and the buying peters out. It seems awfully unlikely that anyone is going to bid them higher than that the day before the jobs report, which may very well clinch a

Fed

tightening at the June 30 meeting.

At 9 a.m. EDT, the

S&P 500

futures were up 3.7 to 1299.9, putting them about 3 above fair value and indicating a firm open.

The Treasury market was higher despite some negative comments last night and this morning from

Alfred Broaddus

, president of that hotbed of monetarism, the

Richmond Fed

. Three reasons for that: First, Broaddus doesn't get to vote on

Federal Open Market Committee

these days (regional Fed presidents rotate in and out of it). Second, a ton of

Fed

officials have made hawkish comments. Third, what's so notable about a Friedmanite saying he's worried about inflation?

Though bond traders are really focusing in on tomorrow's jobs report, there's yet another round of Talking Feds to come across the wire today. Governors

Laurence Meyer

and

Edward Gramlich

take to the podium.

The 30-year Treasury was up 3/32 to 90 21/32, putting the yield to 5.92%.

Worries that China was on the brink of devaluing its currency rocked Asian bourses after officials told Japanese bankers that they will not be able to convert foreign currencies into renminbi starting June 10. That hurt the Japanese yen and sent stocks lower throughout the region.

The currency jitters sent Tokyo stocks lower, though arguably after three days of gains there would have been profit-taking in any case. The

Nikkei

lost 190.49, or 1.2%, to 16,227.50.

Hong Kong shares swooned, too, before taking back their losses after Chinese central bankers said new currency rules were simply meant to limit the flow of renminbi in and out of the country and repeated their vow not to devalue. After the late-day rally, the

Hang Seng

ended up 12.97 to 12,471.61.

European stocks were up a bit on expectations of a decent U.S. open. In Paris, the

CAC

was up 25.97 to 4341.31. In London, the

FTSE

was up 30.75 to 4346.09.

Frankfurt markets were closed for Corpus Christi Day.

Thursday's Wake-Up Watchlist

By

Brian Louis

Staff Reporter

  • Texaco (TX) - Get Report ended merger talks with Chevron (CHV) , saying its board "found no compelling basis for discussions to continue, and Chevron's proposal to be unacceptable for reasons including complexity, feasibility, risk and price." According to news reports, Chevron was offering 70 a share for Texaco, whose shares closed yesterday at 64 1/2. Chevron replied it was "surprised that the Texaco board turned down a very competitive offer that included a significant price premium to Texaco shareholders and an opportunity to receive Chevron stock, with its acknowledged strong growth prospects."
  • Roche intends to exercise a call option to acquire the shares in Genentech (GNE) - Get Report it doesn't already own. After redeeming the shares, Roche said it intends to sell up to 19% of Genentech to the public, maintaining the biotech's status as a publicly traded, independent legal entity. In other news:
  • Ames Department Stores' (AMES) May same-store sales rose 6.4%.
  • AnnTaylor Stores' (ANN) May same-store sale rose 10.1%.
  • Best Buy (BBY) - Get Report expects to report fiscal first-quarter earnings of about 20 cents a share, well above the current First Call 18-analyst consensus estimate of 13 cents. Best Buy earned 8 cents a share in the year-ago period. The company said it will release first-quarter earnings June 15.
  • Dollar General's (DG) - Get Report May same-store sales rose 9.2%.
  • Kmart's (KM) May same-store sales rose 3.7%.
  • Lockheed Martin Aeronautical Systems, a unit of Lockheed Martin (LMT) - Get Report, plans to shed up to 2,000 jobs over the next year. About 40% of the reductions will come from retirements, attrition or transfers. About 9,550 people work for the Marietta, Ga.-based operation.
  • May Department Stores' (MAY) May same store sales rose 2.9%.
  • Pier 1 Imports' (PIR) - Get Report May same-store sales rose 5.9%.
  • Sears' (S) - Get Report May same-store sales rose 1.9%.
  • ShopKo's (SKO) May same-store sales rose 9.4%.
  • Wal-Mart's (WMT) - Get Report May same-store sales rose 7.7%.