NEW YORK ( TheStreet) -- Stock futures were paring losses Wednesday after better-than-expected jobs reports helped offset a raft of downbeat political and economic news from Egypt to China.
Futures for the S&P 500 were falling 5.75 points, or 6.28 points below fair value, to 1,601.5, while futures for the Dow Jones Industrial Average were dropping 44 points, or 37.41 points below fair value, to 14,817. Futures for the Nasdaq were down 7.5 points, or 7.08 points below fair value, to 2,915.75.
The ADP National Employment Report showed that private sector employment in the U.S. increased by a greater than expected 188,000 jobs in June from May after May's job gains were revised downward to 134,000. Economists on average were expecting June gains of 160,000.
The Labor Department reported that weekly initial jobless claims for the week ending June 29 fell 5,000 to 343,000, which was better than expected. Economists were expecting them to come in at 345,000. The four-week moving average was 345,500, a decrease of 750 from the previous week's average of 346,250.Continuing claims for the week ending June 22 decreased by 54,000 to 2.933 million, also better than expected. Economists were predicting continuing claims of 2.953 million. Alcoa (AA - Get Report) was slipping more than 2% to $7.65 in premarket trading after the aluminum producer was cut to "neutral" from "overweight" by analysts at JPMorgan Chase driven by predictions of weaker aluminum prices. Credit Suisse (CS - Get Report) was falling 2.87% to $26.10; Deutsche Bank (DB - Get Report) was down 2.16% to $40.24, and Barclays (BCS) was off 1.35% to $16.80. Credit ratings on all three European financial services firms were slashed by Standard and Poor's analysts who wrote that uncertain market conditions and new regulations could hurt their businesses. However, S&P reaffirmed its long-term A rating for UBS (UBS). Investor confidence was taking a hit Wednesday as August crude oil futures spiked by $1.96 to $101.56 a barrel after Egyptian President Mohamed Morsi dismissed widening and sometimes violent protests calling for his departure and the country's foreign minister resigned amid the pressures. In Portugal, stocks sank and bond yields gained sharply after two prominent ministers resigned, triggering anxiety about a possible collapse of the Portuguese government that could put its €78 billion bailout program in jeopardy. Adding to the global headaches was lackluster services sector data that deepened concerns about a slowing Chinese economy amid evidence of a slump in the manufacturing sector. In other economic news, the Mortgage Bankers Association reported that its mortgage index dropped 11.7% in the week ended June 29 after falling 3% the preceding week as mortgage rates continued to rise on expectations of Federal Reserve stimulus tapering later this year, discouraging potential homebuyers. The June Challenger job cuts report showed that planned job cuts rose slightly last month as employers announced workforce reductions totaling 39,372 during the month, up 8.2% from May, though the pace of downsizing through the first half of the year was down about 9% from last year. The report said that the economy is picking up speed, but threats to job security still exist in the form of federal spending cutbacks stemming from sequestration as well as the potential fallout from the implementation of healthcare reforms. The Census Bureau reported that the U.S. trade deficit widened in May to $45 billion from $40.1 billion in April. A deficit of $40.1 billion was expected. The June read on the ISM Services Index will be out at 10 a.m. The FTSE 100 in London was slumping 1.59% and the DAX in Germany was dropping 1.65%. The Hong Kong Hang Seng closed off 2.48% and the Nikkei 225 in Japan finished down 0.31%. The benchmark 10-year Treasury was rising 8/32, diluting the yield to 2.45%. The dollar was falling 0.12% to $83.44 according to the