Wall Street set for lower open, with Dow staying adrift of 20,000

By Yashaswini Swamynathan

REUTERS - Wall Street was set to open slightly lower on Monday as oil prices slipped, while a drop in P&G and Coca-Cola could keep the Dow Jones Industrial Average from hitting the historic 20,000 mark.

P&G and Coke were down 1.2 percent after Goldman Sachs downgraded both the consumer staple stocks.

Dow e-minis were down 48 points, or 0.24 percent, with 18,608 contracts changing hands. S&P 500 e-minis were down 3.25 points, or 0.14 percent, with 88,660 contracts traded.

Nasdaq 100 e-minis were up 1.5 points, or 0.03 percent, on volume of 17,200 contracts.

The Dow hit a record 19,999.63 points on Friday, while the S&P 500 and the Nasdaq also hit all-time highs, after a late pop in Apple and other technology stocks.

Wall Street has rallied since Donald Trump won the U.S. election in November as investors bet he will introduce business-friendly policies.

But the rally has led to lofty valuations - the S&P is trading at about 17 times expected earnings, compared to its 10-year average of 14. That could make investors cautious as they gear up for the fourth-quarter earnings season.

"The market is building drama around 20,000 and if and when we get promising earnings reports, the Dow will go through the point like a hot knife through butter," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.

The first peek into how companies fared last quarter will be provided later this week by big U.S. banks, including JPMorgan, Bank of America and Wells Fargo.

S&P 500 companies overall are expected to post a 6.1 percent increase in profit in the quarter, according to Thomson Reuters I/B/E/S.

Oil prices fell more than 2 percent on Monday as signs of growing U.S. production outweighed optimism that other producers were sticking to a deal to cut supply to bolster prices.

Boston Federal Reserve President Eric Rosengren on Monday called for the U.S. central bank to step up its pace of interest-rate hikes, warning of inflation risks if it did not.

Among stocks, Dow component UnitedHealth slipped 0.5 percent to $161.58 premarket after its Optum unit said it would buy Surgical Care Affiliates Inc for about $2.30 billion. Surgical Care's stock was up 15 percent.

VCA Inc, which runs hospitals for animals, soared nearly 29 percent to $91 premarket after Mars Inc said it would buy the company for $7.7 billion.

DaVita's shares lost 4.7 percent to $62.7 after the company and Germany's Fresenius Medical said they got subpoenas from federal prosecutors relating to a charity that helps patients pay for kidney dialysis.

Healthcare stocks will be in focus for the day as a number of companies present at J.P. Morgan's healthcare conference.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Savio D'Souza)