Wall Street set to open flat on last day of strong quarter

By Yashaswini Swamynathan

(Reuters) - U.S. stocks looked set to open slightly lower as investors prepared to lock in gains on what is likely to be Wall Street's strongest first-quarter performance in four years.

A raft of strong economic data and the possibility of fiscal stimulus under President Donald Trump have driven U.S. equities to record highs since his election.

The S&P is on track to gain 5.8 percent and the Dow 4.9 percent for the first quarter ending Friday, their biggest quarterly gains since 2013.

"It's been a decent start to the quarter for stocks, and so far the market has navigated a somewhat uncertain terrain with grace," said Adam Sarhan, chief executive officer at 50 Park Investments in Florida.

"It's perfectly normal on the last day of the quarter and the last day of the month to see some profit taking, especially after a strong run."

Dow e-minis were down 17 points, or 0.08 percent at 8:32 a.m. ET (1232 GMT), with 17,746 contracts changing hands.

S&P 500 e-minis were down 3.5 points, or 0.15 percent, with 126,574 contracts traded.

Nasdaq 100 e-minis were down 3 points, or 0.06 percent, on volume of 20,860 contracts.

As stocks continue to soar, investors are looking to the first-quarter earnings season to justify Wall Street's lofty valuations.

The S&P is trading at about 18 times earnings estimates for the next 12 months against its long-term average of 15, according to Thomson Reuters data.

However, the improvement also means more interest rate hikes by the Federal Reserve. New York Fed President William Dudley said on Thursday evening that it was appropriate to tighten monetary policy to reduce the risk of overheating the economy.

On Friday, oil prices fell 0.8 percent after a three-day rally. [O/R]

A report from the Commerce Department showed U.S. consumer spending barely rose in February, but the biggest annual increase in inflation in nearly five years supported expectations of further interest rate hikes this year.

Shares of DuPont were up 0.6 percent at $82.11 in premarket trading after the company said it would sell its crop protection business to FMC Corp and buy its health and nutrition unit in a deal that will give DuPont about $1.6 billion. FMC's shares jumped 12.6 percent.

U.S.-listed shares of Blackberry were up 5 percent at $7.30 after the company reported fourth-quarter profit above expectations and said it expected to be profitable on an adjusted basis in 2018.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)