Stocks were set to open lower on Wednesday with materials shares looking weak on falling commodity prices, but losses were capped after a report showed a big jump in new private-sector jobs.

U.S. private employers added 297,000 jobs in December, according to the report, nearly triple forecasts.

It certainly looks to us that this is further indication that the economy continues to slowly but surely improve, said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

But the U.S. dollar rose against a basket of currencies <.DXY>, sapping investor appetite for commodities and other risky assets.

Oil prices were off 0.7 percent, adding to a 2.4 percent slide Tuesday, while copper dropped 1.3 percent from a record in the prior session.

Dow component Alcoa Inc dropped 1.1 percent to $16.34 in premarket trading, and the Select Sector Energy SPDR ETF fell 0.5 percent to $67.80.

People are looking for a floor in commodities, said Rick Meckler, president of investment firm LibertyView Capital Management in New York. He said a turnaround in materials prices could provide added support to the equities markets.

S&P 500 futures fell 3.3 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dropped 28 points and Nasdaq 100 futures declined 3.25 points.

The ADP report came ahead of widely followed government non-farm payrolls data due Friday, with economists expecting that the economy created 140,000 jobs last month.

Shares of Family Dollar Stores Inc dropped 7.9 percent to $45.40 premarket after the discount chain reported first-quarter earnings that missed expectations.

At 10 a.m., the December ISM non-manufacturing index is due, with forecasts showing the services sector continued to grow last month, adding to recent evidence that the overall economy is on the mend. Economists forecast a reading of 55.6 versus 55.0 in November.

Portugal cleared its first funding hurdle of 2011 on Wednesday, keeping short-term borrowing costs within expected limits, but investors still uneasy over euro zone debt troubles that have weighed on the single currency and global equity markets.

(Reporting by Rodrigo Campos; additional reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

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