U.S. stock index futures trimmed sharp losses, but remained lower, after news of a surge in private sector jobs.
Futures had been under pressure as oil added to steep declines in the previous session, but gold prices steadied after their fall.
Private employers added 297,000 jobs in December, according to the ADP Employer Services report, jointly developed with Macroeconomic Advisers. That's far more than the 100,000 estimate by economists surveyed by Reuters. The previous month private employers had added a revised 92,000, slightly less than the 93,000 originally reported.
The dollar strengthened after the ADP report, and was up to session highs against a basket of foreign currencies. Oil, meanwhile, continued to fall, as did copper, often seen as a bellwether for economic activity because of its multiple uses.
Earlier, news that planned layoffs in December fell to the lowest level since 2000, with just 32,000 furloughs anticipated, did little to lift futures. That data was reported by outplacement firm Challenger, Gray & Christmas.
Also, mortgage applications were mixed at the end of the year as rates reached seven-month highs. A seasonally-adjusted index of mortgage application activity rose 2.3 percent for the week ended Dec. 31, and fell 3.9 percent the week before.
Later, the Institute for Supply Management will issue its December reading of the services sector.
The selloff in commodities is likely a short-term correction and prices could recover over the longer term, according to Kit Juckes, global head of foreign exchange strategy at Societe Generale.
"As long as the global economy is recovering and rates are zero and we're pumping money in, we're building up asset bubbles rather than anything else," Juckes told CNBC.
Quarterly earnings began to trickle in, with Mosaic reporting a big gain in profit on a surge in sales. Revenue gains will be closely watched on Wall Street to see whether companies are actually growing sales or merely hitting earnings targets by cutting costs. Mosaic shares jumped 3.4 percent in pre-market trading.
But Family Dollar shares tumbled nearly 8 percent after the discount retailer reported a lower-than-expected profiton compressed margins and higher freight costs.
Also, Alcoa slipped 1.5 percent premarket after Citigroup downgraded the company to a "hold."
Asian indexes ended mixed, but mostly lower in the wake of the commodities selloff. European shares were lower with a rise in telecommunication stocks failing to offset a fall in chemical-related shares. Portugal saw the yield on its 6-month T-bills rise at a debt auction to raise 500 million euros ($662.6 million).
In other news, retailers have enjoyed a strong holiday season for sales, according to MasterCard SpendingPulse. Both apparel and high-end items saw strong sales growth in December, the new report said.
But BJ's Wholesale Club may be under pressure Wednesday after news it will close five stores and cut hundreds of employees. The big box retailer—considered a takeover target—also reported disappointing same-store sales for December.
Walgreen's same-store sales also disappointed as pharmacy sales fell short of expectations. The drugstore chain's shares slipped in pre-market trading.
Shares of Qualcomm and Atheros rose after news Qualcomm agreed to buy the semiconductor maker for $45 a share. Atheros shares rose 18.9 percent on Tuesday after the New York Times reported the news.
Borders rose slightly after news in the New York Times that the struggling bookstore chain is talking with publishers about converting deferred payments into interest-bearing debt. The Times also said people close to Barnes & Noble would prefer to focus on digital growth rather than a merger with Borders.On the Calendar This Week:
WEDNESDAY: ISM non-manufacturing index, oil inventories; Kansas City Federal Reserve President Hoenig speaks.
THURSDAY: Chain store sales, Monster employment index, jobless claims, natural gas inventories, Treasury STRIPS, money supply; earnings from Monsanto.
FRIDAY: Nonfarm payrolls report, consumer credit; Federal Reserve Chairman Bernanke speaks, Federal Reserve Vice Chairman Janet Yellen speaks.
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