Indications: U.S. futures drift as ADP sees employment fall

Wednesday, January 6, 2010

Indications: U.S. futures drift as ADP sees employment fall

LONDON (MarketWatch) -- U.S. stock futures were in weaker territory on Wednesday as a payrolls processing firm said employment fell in December, two days ahead of a key government report.

S&P 500 futures fell 3.1 points to 1,129.20 and Nasdaq 100 futures fell 4.25 points to 1,881.00. Futures on the Dow Jones Industrial Average fell 19 points.

U.S. stocks were little moved Tuesday after a strong start to 2010, with the Dow Jones Industrial Average falling 12 points while the S&P 500 rose 4 points and the Nasdaq Composite finished broadly unchanged. Pending-home sales slumped 16% in November, while car sales were surprisingly strong.

Private-sector employment decreased by 84,000 in December, ADP said Wednesday, though that was the smallest decline since March 2008. The more closely followed government report is due on Friday.

At 10 a.m. Eastern comes services sector data, and in the afternoon minutes from the last Federal Reserve interest-rate-setting meeting will be published. Recent speeches have made it clear that the U.S. central bank has no intention of raising interest rates anytime soon.

"Modest economic improvement is expected to keep policy on hold, [and] we remain comfortable with our long risk/long cyclical longer-term bias that has informed our trading stance for much of the last year," said Noah Weisberger, an analyst at Goldman Sachs, in a note to clients.

"However, we are also mindful that over the last several months, macro trends have been hard to sustain. And with payrolls looming at the end of the week, cross currents abound and the balance of risks may shift."

Commodities futures were mixed on reaction to the cold weather and its impact on global demand. Oil futures traded around $81.50 a barrel while most metals futures, notably copper, traded higher. Weekly energy inventories data also is due for release.

The dollar index /quotes/comstock/11j!i:dxy0 (DXY 77.69, +0.07, +0.09%) rose 0.2% following comments from a European Central Bank board member that other E.U. states won't aid debt-laden Greece. Meanwhile, Japan's Finance Minister Hirohisa Fujii has resigned and will be replaced by the country's Deputy Prime Minister Naoto Kan.

The agrichemical sector will be in the spotlight after Mosaic /quotes/comstock/13*!mos/quotes/nls/mos (MOS 63.15, +1.44, +2.33%) reported a weaker-than-forecast 89% drop in the fiscal second quarter and Monsanto /quotes/comstock/13*!mon/quotes/nls/mon (MON 85.27, +1.84, +2.21%) swung to a $19 million loss.

Family Dollar /quotes/comstock/13*!fdo/quotes/nls/fdo (FDO 27.49, +0.10, +0.37%) rose nearly 9% in pre-market trade after reporting a stronger-than-forecast fiscal first-quarter profit.

Boise /quotes/comstock/13*!bz/quotes/nls/bz (BZ 5.45, +0.12, +2.25%) gained 6.6% while Louisiana-Pacific /quotes/comstock/13*!lpx/quotes/nls/lpx (LPX 7.56, +0.28, +3.85%) slumped 6% after a Goldman Sachs note on forestry stocks.