Wall Street set for flat open; Facebook down premarket

Tue May 22, 2012 9:11am EDT
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By Angela Moon

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: Quote) 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: Quote) 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.   Continued...

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