The stock market opened lower and flirted with losses on Wednesday but managed to hold its ground, ending the session essentially where it began.  Trading volume was light, totalling just 759 mln shares at the NYSE versus 854 mln shares for Tuesday's rally effort.

The current futures indication suggests the equity market will open on the downside once again, although it would be remiss not to add that the indication is much improved from just a few hours ago.

Weighed down by eurozone concerns that were fueled by reports France had to pay slightly higher rates than it did before to move EUR 6.2 bln of 10-year and 30-year paper at auction today, the S&P futures were down 12 points.

At the moment, the S&P futures are down just five points and are trading 0.4% below fair value.

The change agent for the futures trade was another round of better-than-expected economic data out of the U.S. that, importantly, revolved around the labor market.

Specifically, the ADP Employment Change report estimated 325,000 jobs were added to private sector payrolls in December.  That was leaps and bounds above the Briefing.com consensus estimate, which was pegged at 180,000, and it sets an optimistic tone ahead of tomorrow's nonfarm payrolls report.

The details of the report indicate small businesses added 148,000 jobs while medium-sized and large businesses added 140,000 and 37,000, respectively.  By sector, the growth was concentrated in the services sector, which added 273,000 jobs.  The goods-producing sector accounted for the remaining 52,000 positions.

The ADP number was quickly attacked by some pundits for containing an upward bias that stems from ADP's treatment of seasonal adjustment factors.  Future reports will shed some light on that point of contention, yet an offsetting point today is that the weekly initial claims report offered another immediate reminder that the labor market is improving.

The Department of Labor for its part added that there were no unusual factors in the latest report for initial claims, which have leading indicator status.

On that note, claims for the week ending December 31 declined by 15,000 to 372,000 (Briefing.com consensus 375,000).  That left the four-week moving average at 373,250, down 3,250 from the prior week.  That is the lowest level since June 2008.

Continuing claims for the week ending December 24 were 3.595 mln (Briefing.com consensus 3.620 mln), which was down 22,000 from the preceding week.  The four-week moving average for continuing claims edged lower to 3.602 mln.

If not for mixed same-store sales reports for December and a number of earnings warnings from the retailers -- J.C. Penney (JCP), Barnes & Noble (BKS), American Eagle Outfitters (AEO), Target (TGT) and Kohl's (KSS) to name a few -- the futures market might have made a complete recovery.

As it is now, the cash market is anticipated to lower, yet the data on the U.S. labor market is not to be overlooked and should underpin the relative value and relative strength arguments for U.S. equities.

(Postscript: For those keeping score at home, there was indeed a Santa Claus rally this year.  Over the last five trading days of 2011 and the first two of 2012, the S&P 500 gained 1.9%.)

--Patrick J. O'Hare, Briefing.com

Patrick J. O'Hare is Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial, please email researchsales@briefing.com.

Note: The analyst owns stock in American Eagle Outfitters.