Wall St to slide after Fed's stimulus wind-down outline

By Rodrigo Campos

NEW YORK (Reuters) - U.S. stocks were set to slide at the open on Thursday, adding to a more than 1 percent drop a day earlier, after Federal Reserve Chairman Ben Bernanke outlined the start of a wind-down of stimuli that has been instrumental to the market's rally.

Bernanke said Wednesday the U.S. economy was expanding strongly enough for the Federal Reserve to begin slowing the pace of its bond-buying stimulus later this year.

His comments triggered selloffs in markets that have been supported by the Fed's $85 billion monthly asset purchases, including Treasuries and U.S. equities. The U.S. dollar rose, its strength continuing into Thursday's session.

U.S. Morning Call: Gold, silver plummet post-Fed day - http://reut.rs/11Fn0m8

"The market tends to overshoot and will continue to do so. We'll probably see an overreaction to this," said Art Hogan, managing director at Lazard Capital Markets in New York.

Even as Bernanke painted a rosier picture of the U.S. economy than some expected, weaker factory output in China and a continued recession in the euro zone kept investors concerned about global growth, adding to pressure on stock markets worldwide.

The number of Americans filing new claims for unemployment benefits rose more than expected last week, but not enough to signal a material shift from the recent pace of moderate job growth.

"The data-dependant part (of Bernanke's remarks) should be seen as a positive," said Hogan. But concern about Fed policy "combined with the long-standing concern of a Chinese slowdown" weighed on stock markets.

S&P 500 futures fell 14 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 fell 81 points, and Nasdaq 100 futures lost 25 points.

The S&P 500 is setting up to test support near 1,618, its 50-day moving average, and the lows from two weeks ago in the 1,598/1,600 area.

Specialty drugmaker Forest Laboratories Inc is among a handful of companies interested in bidding for Irish drugmaker Elan Corp Plc, two people familiar with the situation said. Elan's Irish shares were up 3.6 percent.

Walt Disney shares fell 1.8 percent in premarket trading after Goldman Sachs removed the stock from its "conviction buy" list.

Shares of Ebix Inc lost about half their value in premarket trading a day after the insurance software provider said that it and an affiliate of Goldman Sachs would cancel their planned merger after U.S regulators started an investigation into allegations of misconduct at Ebix.

At 10:00 a.m. EDT (1400 GMT), the National Association of Realtors releases existing home sales for May. At the same time, the Conference Board will release its report on May leading economic indicators and a Philadelphia Fed survey is due on June business activity.

(Editing by Bernadette Baum)