Wall Street set to open lower as oil prices dip

By Yashaswini Swamynathan

REUTERS - Wall Street was set for a lower open on Thursday as a drop in oil prices more than offset strong weekly labor market data.

The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to sustained strength in the labor market despite a sharp slowdown in hiring last month.

The jobless claims data gave investors their first read of the labor market since Friday when dismal May payrolls numbers jolted the markets.

Still, a more than 1 percent decline in oil on Thursday kept stock futures under pressure.

Traders took profits, ending a three-day rally in oil prices that was spurred by a weak dollar. The dollar has fallen since the monthly jobs report reduced the chances of an interest rate hike in the near term.

The weaker dollar not only boosts commodities, but is beneficial to U.S. multinationals that derive a large portion of their sales from overseas.

The contrasting fortunes of oil and the dollar have spurred a rally in stocks for the past three days.

The Dow closed above the 18,000 mark on Wednesday for the first time since April, while the S&P 500 is less than 1 percent shy of its record intraday high.

"There is no fresh catalyst to drive the markets higher, even though it's a stone's throw away from record highs," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.

"This shows some nervousness over the quality of the rally."

Dow e-minis were down 57 points, or 0.32 percent at 8:37 a.m. ET, with 21,383 contracts changing hands.

S&P 500 e-minis were down 7.75 points, or 0.37 percent, with 211,643 contracts traded.

Nasdaq 100 e-minis were down 13.5 points, or 0.3 percent, on volume of 23,237 contracts.

Oracle fell 1.6 percent to $38.64 premarket after a U.S. judge rejected the company's bid to overturn a jury verdict in favor of Google parent Alphabet.

Chesapeake Energy fell 4 percent to $4.77 after an RBC downgrade. The natural gas producer was the biggest loser among S&P 500 components premarket and one among the many energy stocks trading lower.

J.M. Smucker jumped 3.2 percent to $137.01 after the processed foods maker reported better-than-expected rise in quarterly sales.

Restoration Hardware tumbled 21 percent to $28.65 after issuing a weak forecast.

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