Wall Street set to open little changed amid earnings

By Tanya Agrawal

REUTERS - Wall Street was set to open little changed on Tuesday as investors digest earnings reports from a slew of consumer products companies, including Kellogg, Coach and CVS Health.

Among other companies scheduled to release results are Dow component Walt Disney, Devon Energy and Genworth Financial.

Investors are taking to the sidelines ahead of Friday's monthly jobs data, which is shaping up to be critical for market as it can provide clues on the timing of a rate hike. The U.S. economy created 225,000 new jobs in July, according to economists polled by Reuters.

Wall Street ended lower on Monday as tumbling oil prices dragged energy shares to a three-year low and factory data from China raised concerns about the world's second-biggest economy.

In the United States, consumer spending recorded its smallest gain in four months, while the pace of growth in the manufacturing sector slowed in July.

Soft data has prompted some investors to argue that the U.S. Federal Reserve might hold off on raising rates until December. After the Fed meeting last week, investors expected a rate increase in September.

The Fed, which has kept interest rates near zero for nearly a decade, has said it will raise rates only when it sees a sustained recovery in the economy.

"If we get some certainty about the strength of the U.S. economy and the likelihood of policy normalization by the Fed, and if a rate hike seems justifiable, that is positive for sentiment ... because a lot of people have been bracing for this," said Stefan Worrall, director of cash equities at Credit Suisse.

Oil prices steadied but have fallen more than 20 percent over the last month, while copper - seen as a bellwether of global growth - nudged off a six-year low.

S&P 500 e-minis were up 0.25 points, or 0.01 percent, with 144,784 contracts traded at 9:02 a.m. ET (1302 GMT). Nasdaq 100 e-minis were down 4 points, or 0.09 percent, on volume of 27,781 contracts while Dow e-minis were up 13 points, or 0.07 percent, with 20,164 contracts changing hands.

With more than half of the S&P 500 companies having reported their second-quarter results, analysts expect overall earnings to edge up 0.9 percent and revenue to decline 3.3 percent, according to Thomson Reuters data.

Valuations remain a concern. The S&P 500 is trading near 16.8 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.

Baxalta shares soared 21.3 percent to $40.21 in premarket trading after Shire said it was seeking to buy the company in a $30 billion all-share deal. U.S.-listed shares of Shire fell 2.8 percent to $260.38.

Sprint rose 5.4 percent to $3.52 after the telecom carrier reported a lower-than-expected quarterly loss while CVS Health fell 2.5 percent to $110 afters its revenue narrowly missed estimates.

Coach was up 5.5 percent at $32.10 after the handbag-maker's results beat expectations.

Regeneron Pharmaceuticals rose 4.8 percent to $581 after the biotechnology company reported a 50 percent rise in quarterly revenue, boosted by increasing demand for its blockbuster eye drug, Eylea.

(Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty)