Wall Street set for flat open after S&P's closing high

NEW YORK (Reuters) - U.S. stock index futures pointed to a flat open on Monday, with investors finding few reasons to keep pushing stocks higher with both the Dow and S&P 500 coming off record closing highs.

The S&P remains about 0.4 percent away from its all-time intraday high of 1,576.09, but few catalysts are seen before the release of the closely watched payroll report on Friday.

The market may have more risks to the downside, with continued uncertainty over the economic situation in Cyprus, though European markets were closed on Monday for a holiday.

"Hitting an all-time high has major psychological importance, and if we can clear that hurdle, there's virtually no overhead resistance in the S&P," said Adam Sarhan, chief executive of Sarhan Capital in New York.

"However, without all the global participants, it's likely to be a quiet day here. And barring some unforeseen event, we should expect things to be relatively calm until the payroll report" on Friday.

The Institute for Supply Management's March reading on manufacturing, due at 10 a.m. (1400 GMT), is seen holding steady at 54.2, same as the prior month. February U.S. construction spending, also scheduled for 10 a.m., is seen rising 1 percent, compared with a 2.1 percent drop in January.

Economic data has been mixed, but strong readings may not be a positive catalyst for markets if investors view the economy as so strong that the Federal Reserve will reduce its bond-buying program, which has been credited with boosting equity prices. Data on the services sector is on tap for Wednesday, followed by the March payroll report on Friday.

S&P 500 futures fell 0.5 point and were about even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures rose 11 points and Nasdaq 100 futures rose 2.5 points.

Equities rose 10 percent in the first quarter, extending a string of monthly gains to five. With the advance, the S&P is now only 0.4 percent away from its all-time intraday high level of 1,576.09.

The S&P's surge in the quarter has very bullish implications. An analysis by Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, showed the index has risen in the three first months of the year nine times in the past 30 years, and in each case, it has posted gains for the year.

The average yearly gain after such a start, the data showed, was 17.56 percent. An advance like that would leave the S&P 500 at about 1,676 at the end of this year.

Despite the positive momentum, some analysts have called for a near-term pullback, and the uncertainty over Cyprus has contributed to stocks' trading in a tight range. The S&P 500 traded within 10 points of its previous all-time closing high for 13 sessions before breaking through.

In company news, Tesla Motors Inc (TSLA.O) jumped 12 percent to $42.53 in premarket trading after forecasting full profitability in the first quarter.

Exxon Mobil Corp (XOM.N) continued cleanup of a pipeline spill that spewed thousands of barrels of heavy Canadian crude in Arkansas. Shares of the Dow component dipped 11 cents to $90 before the bell.

Dell Inc (DELL.O) warned that it would be dangerous to take on a lot of debt and remain a public company given its worsening profit outlook, in a sign that it views proposals from Blackstone Group LP (BX.N) and billionaire investor Carl Icahn as fraught with risk. The comments came on Friday, which was a holiday for U.S. markets.

(Editing by Chizu Nomiyama and Kenneth Barry)

Updated Date: Apr 02, 2013 02:30 AM

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