Wall Street set to open lower after three-day rally

By Tanya Agrawal

(Reuters) - Wall Street looked set to open slightly lower on Friday as oil prices came off a two-week high, a day after the Nasdaq closed at a record high for the second straight day.

All three major indexes are poised to end the week higher after the S&P 500 index notched its best two-day performance in more than two months on Thursday. The S&P is up 6.5 percent for the year.

Investors have been in risk-on mode again, encouraged by the Federal Reserve's decision to stand pat on interest rates at a meeting this week.

"There is some consolidation after the very active and positive week for stocks based on news flow from the central banks, said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management.

Fed Chair Janet Yellen said on Wednesday that U.S. growth was looking stronger and rate increases would be needed to keep the economy from overheating and fueling high inflation. But the central bank maintained the low-interest rate environment that has helped underpin the bull market for stocks.

The U.S. central bank had hinted that it might raise rates before the year ends and interest rate futures were pricing in roughly a 60 percent chance of a rate increase by December.

"Barring any major changes in economic data or market volatility, we think a December rate hike is on the cards. The underlying message from the Fed this week was that they want to raise rates," Donabedian said.

S&P 500 e-minis were down 3.5 points, or 0.16 percent, with 123,253 contracts traded at 8:31 a.m. ET (1231 GMT). Nasdaq 100 e-minis were down 8.75 points, or 0.18 percent, on volume of 20,255 contracts. Dow e-minis were down 17 points, or 0.09 percent, with 16,169 contracts changing hands.

Oil prices were little changed on Friday, following two sessions of strong rises, on caution ahead of a gathering of OPEC ministers next week in Algeria to discuss possible production cooperation to rein in global oversupply.

Investors will also keep an eye on a number of Fed speakers who are scheduled to speak at different events for further clues regarding the timing of the next rate hike.

Fed speakers include Dallas Federal Reserve Bank President Robert Kaplan, Philadelphia Fed President Patrick Harker, Cleveland Fed President Loretta Mester and Atlanta Fed President Dennis Lockhart.

Twitter shares were down 3.9 percent at $17.90 in premarket trading after RBC cut its rating on the stock to "underperform".

Facebook was down 2.3 percent at $127.11 after the WSJ reported the social media giant overestimated viewing time for video ads by 60-80 percent for two years.

Yahoo was down 1.7 percent at $43.38, a day after the company said at least 500 million of its accounts were hacked in 2014 in a theft that appeared to be the world's biggest known cyber breach.

(Reporting by Tanya Agrawal; Editing by Don Sebastian)