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Pre-Market: Sears Projects Loss in Holiday Quarter; US Job Growth Disappoints


Non-farm payrolls fell far short of expectations..

US stocks are poised to rise this morning despite a disappointing report on US job growth. Global shares and commodities also rallied on news that China's exports grew last month.

Just before the data release, stock futures were higher in pre-market trading. Future contracts on the Dow Jones Industrial Average (INDEXDJX:.DJI) were up 0.36% to 16,450.00. S&P 500 (INDEXSP:.INX) futures rose 0.38% to 1,840.00 and Nasdaq (INDEXNASDAQ:.IXIC) futures gained 0.56% to 3,567.75.

Sears Holding Corp. (NASDAQ:SHLD) fell 12.3% in the pre-market today, after the retail company forecast a quarterly loss during the crucial holiday shopping period. Sears projects that its loss will fall between $250 million and $360 million in the quarter that ends on Feb. 1. A year earlier, it lost $489 million. Same-store sales fell 7.4% year-over-year.

Alcoa (NYSE:AA) unofficially kicked off the fourth-quarter earnings season yesterday. The aluminum giant lost $2.34 billion in the last quarter, mostly from one-time charges related to acquisitions. Excluding non-recurring charges, it earned $0.04 per share, missing expectations.

Abercrombie & Fitch Co. (NYSE:ANF), a recent laggard, jumped 14.5% in the pre-market after the company raised its outlook for 2014. Though same-store sales fell 6% in the nine weeks ending on Jan. 4, management expects EPS of $1.55-$1.65 for fiscal 2014.

US employers added 74,000 jobs in December 2013, the lowest monthly gain since early 2011. The unemployment rate, projected to stay flat at 7%, fell to 6.7%, the lowest level since October of 2008. The drop in the employment rate could be due to a revision of the way the Bureau of Labor Services seasonally adjusts the survey data. The participation rate also fell slightly to 62.8%.On the heels of a encouraging reports on private-sector job growth and fewer planned layoffs, economists had expected 193,000 new jobs added last month.

The hardest-hit industry was construction, which shed 16,000 jobs. Retail added 55,300 workers and 40,400 temps were hired, suppressing the total of full-time hires. Health care, usually one of the strongest industries, lost 1,000 employees. In November of last year, 35,400 health workers were hired. November's job gains were revised up to 241,000 from 203,000.

China's exports grew 4.3% year-over-year in December 2013, the most in five months. Chinese stocks dropped today as this report fell short of expectations, but commodities prices rose on hopes that the second-largest economy and its trading partners are picking up steam. West Texas Intermediate oil rose 1.05% to $92.62 per barrel.

This also shows that China has probably overtaken the United States as the number-one trader. Last year, the total value of Chinese imports and exports totaled $4.16 trillion. From January to November, the US traded $3.5 trillion, partially helped by a domestic energy boom.

The eurozone economy rose by only 0.1% in the third quarter of last year, according to the final GDP estimate for the period. On a yearly basis, the currency union is still in recession, falling 0.4%. This economic backdrop and the danger of deflation turns up the pressure on the European Central Bank's Mario Draghi, who signaled yesterday that he is considering more monetary stimulus. French industrial production also picked up, rising 1.5% year-over-year in November.

Twitter: @vincent_trivett
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