May 22, 2012 / 12:07 PM / in 5 years

Wall Street set for flat open; Facebook down premarket

Traders work on the floor of the New York Stock Exchange May 7, 2012.Brendan McDermid

NEW YORK (Reuters) - Wall Street was set to open little changed on Tuesday as concerns about global growth weighed on investor sentiment.

Stock index futures rose earlier as shares of No. 1 consumer electronics chain Best Buy (BBY.N) jumped following earnings and revenue that topped expectations. But as the stock erased gains to turn lower, the market also gave up gains to trade flat.

Investors were hopeful that European leaders would come up with a way to tackle the region's financial crisis, but worries about global economic growth curbed risk appetite. Japan's sovereign rating was cut by Fitch as a political stalemate dimmed chances the country could curb its snowballing debt. This also curbed market sentiment.

S&P 500 futures lost 0.2 point and were in line with 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 lost 7 points, while Nasdaq 100 futures added 3.75 points.

"S&P 500 is bouncing near 1290 support aided by deeply oversold momentum... but some measures of downside intensity suggest market conditions could get worse before they get better," said Ari H. Wald, analyst at Brown Brothers Harriman & Co.

Best Buy Co Inc (BBY.N) posted earnings, excluding items, of 72 cents a share, up from 65 cents a share a year ago, and higher than Wall Street's expectation of 59 cents share. Best Buy shares were off 1.1 percent to $17.96 in premarket trade.

Fitch lowered Japan's long-term foreign currency rating to A plus from AA. It cut the local currency rating to A plus from AA minus. Both were cut with a negative outlook.

The Paris-based Organisation for Economic Co-operation and Development also forecast that global growth would ease to 3.4 percent this year from 3.6 percent in 2011.

The U.S. National Association of Realtors (NAR) releases at 10:00 a.m. ET (1400 GMT) existing home sales for April. Economists forecast a 4.60 million annualized unit total, versus 4.48 million in March.

Nasdaq OMX (NDAQ.O) faces short-term costs from its botched handling of Facebook (FB.O) shares on their first day of trading on Friday, but longer-term repercussions could be more expensive as it struggles to restore its image. Initially, the exchange said it planned to set aside $13 million to resolve bad trades; even if all of that was used, the cost would be minimal compared with the $387 million in net income it reported last year.

In the run-up to Facebook's $16 billion IPO, Morgan Stanley (MS.N), the lead underwriter on the deal, unexpectedly delivered some negative news to major clients: The bank's consumer Internet analyst, Scott Devitt, trimmed his revenue forecasts for the company.

Facebook shares were off 3.1 percent to $32.96 in premarket trade.

The Asian prime brokerage units of Credit Suisse CSGN.VX and Bank of America Corp (BAC.N) gained market share over the past year as Goldman Sachs (GS.N) and Morgan Stanley (MS.N), the top two industry players, lost hedge fund clients and assets, a survey showed.

China will fast-track approvals for infrastructure investment to combat a slowdown in the economy, a state-backed newspaper reported on Tuesday, underlining a call by Premier Wen Jiabao for policies to maintain growth.

Stocks rose more than 1 percent on Monday, with the S&P 500 snapping a six-day losing streak, as equities rebounded from their biggest weekly drop in almost six months.

Editing by Dave Zimmerman

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