NEW YORK ( TheStreet) -- Stock futures were paring losses Thursday after a better-than-expected employment change report for December.
Futures have been dipping throughout the morning after stocks surged the previous day as investors are worried that the last-minute budget agreement passed by Congress falls short of dealing with the U.S. deficit.
Futures for the Dow Jones Industrial Average were down 9 points, or 21.55 points below fair value, at 13,322. Futures for the S&P 500 were down 0.75 points, or 0.57 points below fair value, at 1456. Futures for the tech-heavy Nasdaq were behind by 0.25 points, or 2.42 points below fair value, at 2738.
One of the next major deadlines is the very few weeks that Congress has left before it must raise the debt ceiling to avert a government default on bills and financial obligations. This means the Obama administration and Congress must tackle the sequestration issue that was pushed back for two months in the "fiscal cliff" deal.Julia Coronado, chief North American economist at BNP Paribas, said the "two parties are yet again starting miles apart" on this issue, with Republicans having already indicated that they believe the tax side of fiscal policy has been addressed for now and their focus will be on spending. The Democrats have indicated they will continue to demand a balanced approach with more tax increases for any agreed-to cuts in spending. "Given the track record of the current Washington crew, we can be sure we will go right to the brink and flirt with default before we reach yet another piecemeal accord," said Coronado. "As in 2011, the battle over the debt ceiling will likely end with a downgrade of the U.S., this time from Fitch and Moody's sometime in Q2." Major U.S. stock averages roared Wednesday, with the Dow soaring more than 300 points, as global risk appetite surged on the first trading day of the year after the House managed to pass the Senate's 11th-hour agreement on averting the fiscal cliff. The International Monetary Fund said Wednesday that while it welcomes the actions by the U.S. Congress to avoid sudden tax increases and spending cuts, more needs to be done to put U.S. public finances back on a sustainable path without harming the still fragile recovery. Specifically, a comprehensive plan that ensures both higher revenue and containment of entitlement spending over the medium term should be approved as soon as possible, the IMF said. The IMF also said it is crucial that the U.S. is able to raise the debt ceiling "expeditiously" and remove remaining uncertainties about the spending sequester and expiring appropriation bills. Payroll processor Automatic Data Processing said that 215,000 jobs were added in December, compared with an upwardly revised 148,000 the prior month. Economists, on average, expected ADP to report a gain of 133,000 jobs in December. The Labor Department reported that initial jobless claims for the week ended Dec. 29 increased by 10,000 to 372,000 from the prior week's upwardly revised 362,000. Continuing claims for the week ended Dec. 22 rose 44,000 to 3.245 million, from the previous week's downwardly revised 3.201 million. On average, economists were expecting initial jobless claims of 365,000 and continuing claims of 3.2 million. Meanwhile, minutes from the Dec. 12 Federal Reserve policy meeting are set to be released at 2 p.m. Gold for February delivery was surging Thursday by $14.30 at $1,690.10 an ounce at the Comex division of the New York Mercantile Exchange, while February crude oil contracts were up $1.05 at $92.87 a barrel.