Stock Futures Pare Losses After Jobs Data

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.

The benchmark 10-year Treasury was up 1/32, diluting the yield to 1.839%. The dollar was up 0.35%, according to the U.S. dollar index.

The FTSE 100 in London was down 0.1%, while the DAX in Germany was behind by 0.32%. Hong Kong's Hang Seng closed up 0.37%.

The Japanese market was closed and is scheduled to reopen on Friday.

In corporate news, Hormel Foods ( HRL) announced that it is buying Unilever's ( UL) Skippy peanut butter business for about $700 million.

Hormel shares were unchanged while Unilever shares were down more than 1% in premarket trading.

Apple ( AAPL) has set its first-quarter earnings release for Jan. 23, with a conference call the same day to discuss the results.

Apple shares were down 0.55%.

Costco Wholesale ( COST) reported a December same-store sales increase of 9%, beating the consensus estimate of 6.5%.

Shares were flat.

Gap ( GPS) is buying women's fashion boutique Intermix for $130 million to help the company gain exposure to the luxury apparel market.

Gap shares were popping more than 4%.

Advanced Micro Devices ( AMD) appointed Devinder Kumar as its chief financial officer after a four-month search.

Shares were unchanged.

Mellanox Technologies ( MLNX) on Wednesday reduced its revenue forecast for the fourth quarter.

The data-storage company said it expects fourth-quarter revenue in a range of $119 million to $121 million, down from previous guidance of $145 million to $150 million.

Shares were plunging more than 16.5%.

Family Dollar Stores ( FDO) reported fiscal first-quarter earnings of 69 cents a share, missing the average analyst estimate of 75 cents a share, and revenue that was in-line with forecasts amid what it said was a challenging holiday shopping season.

Shares were tumbling more than 8.5%.

Quiksilver ( ZQK) co-founder Robert McKnight Jr reportedly will step down from his CEO post, effective Jan. 11. He has been with the surfing outfitter since 1991.

Former Walt Disney executive Andy Mooney will take over as CEO, according to The Wall Street Journal.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

More from Markets

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Trump Takes Aim at Auto Imports; Markets End Mixed -- ICYMI

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices