Wall Street set to open lower as Fed clouds rate hike timing

By Yashaswini Swamynathan

(Reuters) - Wall Street looked set to open lower on Thursday as the Federal Reserve gave little insight into whether it would raise interest rates at its next meeting, even as the central bank painted an upbeat picture of the economy.

The Fed left interest rates unchanged on Wednesday but gave no firm signal of a hike in March, as it awaits more clarity on President Donald Trump's fiscal policies, adding another layer to the uncertainty triggered by his recent comments and decisions.

The dollar dropped to a near 12-week low of 99.23 against a basket of major currencies. The greenback has been beaten down by Trump's comments on its strength and concerns over his protectionist policies.

Trump's administrative priorities such as imposing restriction on travel to the United States and ending trade deals have caused uncertainty and made it hard for investors to have conviction in the market.

"The Fed is concerned that the unraveling of trade deals could be very negative to the economy," said Peter Cardillo, chief market economist at First Standard Financial in New York.

"You could have improving earnings and good news on the economy, but that is getting overshadowed by the 'worry trade' with investors taking on a wait-and-see attitude."

Wall Street was lifted on Wednesday by a spike in Apple after the company reported strong results, but the S&P 500 and the Dow pared most of their gains at the close due to losses in energy and utilities.

A clutch of earnings including Amazon.com, Visa and Amgen will keep investors busy on Thursday.

Dow e-minis were down 44 points, or 0.22 percent, at 8:31 a.m. ET (1331 GMT), with 25,945 contracts changing hands.

S&P 500 e-minis were down 4.75 points, or 0.21 percent, with 137,521 contracts traded.

Nasdaq 100 e-minis were down 11.25 points, or 0.22 percent, on volume of 26,439 contracts.

Initial jobless claims fell more than expected to 246,000 last week, compared to economists' estimates of 250,000 signaling tightening labor conditions. The report comes ahead of a closely watched monthly hiring data on Friday.

Facebook edged up 0.98 percent to $134.49 in heavy trading following the company's strong quarterly earnings and revenue.

Ralph Lauren dropped 10.15 percent. The company said Chief Executive Officer Stefan Larson would leave following disagreements with its chairman.

Digital imaging company Shutterfly fell 19 percent to $42 following a 30.6 percent decline in quarterly profit.

Mead Johnson jumped 27.3 percent to $88.26 after Reckitt Benckiser said it was in advanced talks to buy the baby formula maker for $16.7 billion.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Sriraj Kalluvila)