US STOCKS-Wall Street to edge up even as payrolls disappoint

Reuters - UK Focus

* December payrolls much lower than expected

* Alcoa (NYSE: AA - news) shares slide after results

* Futures up: Dow 41 pts, S&P 5 pts, Nasdaq 11 pts

By Rodrigo Campos

NEW YORK (Frankfurt: HX6.F - news) , Jan 10 (Reuters) - U.S. stocks were set to riseslightly at the open on Friday even as the December jobs reportcame in much weaker than anticipated.

Equity futures sharply pared gains after data showed U.S.employers hired in December only 74,000 workers, the smallestincrease since January 2011.

"That's what markets do," said John Canally, investmentstrategist and economist for LPL Financial (NasdaqGS: LPLA - news) in Boston.

"You have a bunch of traders sitting there looking at anumber they don't know anything about, they see a weak numberand they hit 'sell'; and when people take a look through itagain they will reconsider."

The data setback was likely to be temporary, however, amidsigns that cold weather conditions might have had an impact.

"It looks like it's a weather issue," Canally said. "The Fedwill see through it as a weather issue. I don't think they willchange after one month of anything bad or good - so they aregoing to stay the course."

Investors are still viewing economic data through the eyesof the Federal Reserve, trying to gauge the pace at which itwill continue to reduce its monthly stimulus.

After the post-data drop, S&P 500 futures rose 5points and were above fair value, a formula that evaluatespricing by taking into account interest rates, dividends andtime to expiration on the contract. Dow Jones industrial averagefutures rose 41 points and Nasdaq 100 futures added 11 points.

At their session high, S&P futures rose more than 9 points.

Alcoa reported a massive quarterly loss on Thursdayafter recent declines in aluminum prices; its shares fell 6.6percent in premarket trading.

Sears Holdings Corp's shares fell 11.6 percent inlight premarket trading a day after the retailer reported steepdeclines in comparable-store sales at its Kmart and U.S.namesake chain for the crucial holiday season.

Shares of trucking company YRC Worldwide (NasdaqGS: YRCW - news) fell 21.5percent in premarket trading a day after sliding 16 percentafter workers represented by the Teamsters union rejected acontract extension that the company proposed, putting a plan torestructure its debt in jeopardy.

Target Corp (NYSE: TGT - news) said a massive payment card data breachthat occurred during the first three weeks of the holidayshopping season affected up to 70 million people, far more thanpreviously estimated. Its shares fell 1.3 percent premarket.

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