U.S. stocks set to open lower as oil slides again

By Abhiram Nandakumar

REUTERS - U.S. stocks were set to open lower on Wednesday as crude prices slid after top producer Saudi Arabia ruled out production cuts to help tackle a global glut.

Stocks have closely tracked oil prices this year as investors fret about the health of the global economy. The S&P 500 is down 6 percent for the year, while the Nasdaq composite has shed more than 10 percent.

U.S. crude was down more than 3 percent, also pressured by data showing an increase in stockpiles. Shares of Chevron and Exxon were off about 1.5 percent premarket.

"There is very little good news for the market to hang its hat on," said John Brady, managing director at brokerage R.J. O'Brien & Associates in Chicago.

"Unless something happens, my sense is that we're going to continue to break down here a little bit," he said.

At 8:29 a.m. ET (1329 GMT), Dow e-minis were down 146 points, or 0.89 percent, with 43,783 contracts changing hands.

S&P 500 e-minis were down 16.5 points, or 0.86 percent, with 336,118 contracts traded. Nasdaq 100 e-minis were down 49 points, or 1.18 percent, on volume of 47,722 contracts.

U.S. stocks slid on Tuesday, after last week's rally lost steam. The market has failed to sustain several rallies in the past two months, with the S&P and the Dow closing higher for three straight days only once this year.

The S&P financial sector is the worst performer among the 10 major sectors in 2016, falling 12.5 percent, as banks brace for defaults from beleaguered oil and gas companies and face the brunt of volatile financial markets.

Economic data due on Wednesday includes a report on new home sales, which are expected to have fallen 4.4 percent in January. The data is due at 10 a.m. ET (1500 GMT).

Investors will also analyze comments from U.S. Federal Reserve policymakers for clues on the central bank's view on the state of the economy ahead of its meeting next month.

While Fed Chair Janet Yellen has hinted that the central bank is likely to stick to its plan to raise rates gradually this year, other policymakers have expressed caution about pressing ahead amid the turbulence in global markets.

Lowe's was down 2.6 percent at $66.15 after the home improvement chain reported results.

JP Morgan was down 1.6 percent at $55.25 after it said it would set aside another $500 million in provisions for expected losses on energy loans and that its investment banking revenue was falling. At least three brokerages cut their price targets on the stock.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Anil D'Silva)