The sharemarket pared an early rise as profit-taking emerged before the release of US non-farm payrolls data due overnight.
Strong earnings results from Westpac and Macquarie Group, together with a jump in resources stocks, initially boosted the market, but bank stocks later retreated.
"There's a bit of fatigue setting in before US payrolls data and that's going to be the key short-term influence next week," said CMC Markets chief market strategist Michael McCarthy.
The benchmark S&P/ASX 200 closed down 0.5 points at 5129.5 after an early jump to 5183.2.
Macquarie Group surged 11 per cent after net profit for the year to March 31 jumped 17 per cent to $851 million, fuelled by a 54 per cent rise in its market-facing divisions. Chief executive Nicholas Moore said profit could rise further in the current year.
JB Hi-Fi jumped 8.1 per cent on stronger earnings guidance. The electrical goods retailer said it expected net profit for the year to June to be in a range of $112m to $116m, representing an 11 per cent increase on the previous year at the top end. The forecast was at least 7 per cent above previous guidance.
Westpac ended down 1 per cent after initially rising 2.6 per cent as its first-half profit rose 10 per cent to $3.5 billion, beating market expectations by about 4 per cent. The bank also raised its interim dividend to 86c a share as widely expected, while announcing a fully franked special dividend of 10c a share.
"The key question will be how long the perfect operating conditions of mortgage repricing, higher trading profits and lower impairment that is supporting growth can last," Macquarie analysts said of Westpac's results.
CBA fell 2 per cent and NAB, which is due to report its earnings next Thursday, fell 0.3 per cent. ANZ rose 0.3 per cent.
BHP Billiton rose 0.6 per cent after the European Central Bank lowered its policy interest rate by 0.25 per cent as widely expected, and US weekly jobless claims hit a five-year low.
London Metal Exchange copper rose 0.8 per cent on Thursday night, while Nymex crude oil rose 3.3 per cent and gold gained 0.7 per cent. But spot iron ore fell 3.5 per cent and nickel fell 3.7 per cent.
CMC Markets' Mr McCarthy said a potential domestic interest rate cut next week could be supportive for yield plays and consumer discretionary stocks.
The Australian dollar rose slightly yesterday, despite markets pricing in a 55 per cent chance of a rate cut from the Reserve Bank on Tuesday, taking the cash rate to a new low of 2.75 per cent.
At the close the dollar was buying $US1.0254, up US0.18c.
While traders expect a rate cut, economists are less certain. A Wall Street Journal survey of 18 economists showed only two expecting a cut. More than two-thirds expect at least one cut by December. Anticipation of a cut has grown following news of tame first-quarter inflation, a fall in new housing permits and a rise in unemployment.
