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Pre-Market Primer: Private Sector Hiring Ramps Up


A welcome preview to tomorrow's jobs report.

MINYANVILLE ORIGINAL After yesterday's huge rally, stocks are set to open slightly lower today as investors sell to lock in gains and economic data points toward a better jobs picture.

Yesterday's trading session saw the major US stock indices all rise by more than 2% after Congress passed a last-minute stopgap deal on taxes to avert the fiscal cliff.

Dow (INDEXDJX:.DJI) futures were down 0.20% at 13,304. Futures contracts on the S&P 500 (INDEXSP:.INX) fell 0.30% to 1,452.80 and Nasdaq (INDEXNASDAQ:.IXIC) futures shed 0.17% to 2,738.75. European and Asian equities also sold off this morning.

Today, economy-watchers got three data points as previews to tomorrow's nonfarm employment report. ADP, a payrolls processor, said that private sector employment increased by 215,000 in December 2012 after rising 118,000 in the month before. Bucking a long-term trend toward heavier hiring in businesses with fewer than 50 employees, medium and large businesses led hiring last month. Economists expected only 140,000 new hires.

Initial claims for unemployment insurance missed expectations, however, spiking to 372,000 last week from 350,000 in the prior week. Economists expected a milder jump to 163,000.

Outplacement firm Challenger Grey & Christmas reported that mass layoffs decreased last month. The firm counted 32,556 mass layoffs, a 43% decrease from 57,081 in November.

This afternoon, the minutes of the Federal Reserve's Dec.11-12, 2012 policy meeting will be released.

Discount retailer Costco (NASDAQ:COST) reported a better-than-expected 9% increase in same-store sales in December 2012, though there was one more sales day than December 2011 in the calculation. Total sales rose 12% to $11.21 billion.

Gap (NYSE:GPS) will by Intermix, a high-end women's fashion retailer. The deal, which the Wall Street Journal reports is valued at $130 million, would give the mid-level apparel company better access to the luxury market.

Techcrunch (NYSE:AOL) reported yesterday that Apple (NASDAQ:AAPL) is rumored to be in talks to acquire Waze, an Israeli mapping start-up. After Google (NASDAQ:GOOG) Maps was removed from iOS in the fall, thousands of iPhone users downloaded Waze as an alternative to the widely panned Apple Maps. Techcrunch says that Waze is hoping for a $750 million deal, but Apple is willing to pay as much as $400 million, plus another $100 million in sweeteners.

Family Dollar (NYSE:FDO) shares fell nearly 8% in the pre-market after reporting a lower-than-expected quarterly profit. The company earned $80.3 million, or $0.69 per share in the quarter that ended on Nov. 24, 2012. This compares to $80.4 million or $0.68 per share in the year-earlier period. Analysts expected earnings of $0.75 per share. Margins were hit by the store's push to sell more everyday items such as cigarettes and magazines to compete with rivals.

Unemployment in Germany increased by 3,000 in December 2012 to 2.94 million, a smaller-than-expected rise. Spanish unemployment fell by 59,094 last month to 4.8 million as retailers hired temporary workers for the holiday shopping season.

China's services industry improved last month. The country's services PMI rose to 56.1 from 55.6 in November. (Readings above 50 signal that growth of the sector is accelerating.)

Twitter: @vincent_trivett
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