US STOCKS-Wall St set to open higher as tech selloff stalls

* Vote on healthcare bill delayed until next month

* Oil falls after increase in U.S. crude inventories

* Spectranetics jumps after $2.16 bln Philips deal

* Futures up: Dow 35 pts, S&P 5.5 pts, Nasdaq 11 pts
(Adds details, comment, updates prices)

By Tanya Agrawal

June 28 (Reuters) – Wall Street looked set to open higher on
Wednesday as the two-day spell of selloff in technology stocks
stalled and after a report that investors overreacted to ECB
chief Mario Draghi’s view on fiscal stimulus.
Euro zone central bank sources told Reuters the market had
overinterpreted Draghi’s comments on Tuesday that the ECB is
ready to start withdrawing the emergency stimulus for the
economy.

The sources, however, clarified that he intended to signal
tolerance for a period of weaker inflation, not an imminent
policy tightening.

The technology index has risen about 17 percent since the
start of the year, making it the best performing sector among
major S&P sectors.

However, investors, concerned with the sector’s lofty
valuations, have been shifting to defensive sectors.

Equity valuations have come under focus at a time when
inflation remains low, recent economic data has been tepid and
President Donald Trump’s pro-growth policies face delays.
The S&P 500 is trading at nearly 18 times forward earnings
estimates, well above its long-term average of 15 times.

Federal Reserve Chair Janet Yellen said on Tuesday the
central bank would continue raising rates gradually and that by
standard metrics, some asset valuations look high.

Fed Vice Chair Stanley Fischer warned the central bank must
remain vigilant in monitoring financial stability risks.

San Francisco Fed head John Williams said investors may be
getting overly complacent about risks and that “the stock market
seems to be running pretty much on fumes.”

A planned vote on Republican healthcare bill to dismantle
the Affordable Care Act was put off to after the Senate’s July 4
recess.

The healthcare legislation, which has encountered resistance
from several Republicans, is the first plank of President Donald
Trump’s domestic policy agenda, with investors eager for him to
move onto his other plans, including tax cuts, infrastructure
spending and deregulation.

Trump’s promises of a pro-growth agenda is partly behind the
S&P’s 13 percent rise since the Nov. 8 election.

“A setback for health reform could put in question tax
reform this year unraveling the ‘Hope Rally'”, Peter Cardillo,
chief market economist at First Standard Financial.

Dow e-minis were up 35 points, or 0.16 percent, with
37,613 contracts changing hands at 8:40 a.m. ET (1240 GMT).

&P 500 e-minis were up 5.5 points, or 0.23 percent,
with 259,971 contracts traded.

Nasdaq 100 e-minis were up 11 points, or 0.19
percent, on volume of 72,754 contracts.

Oil edged lower towards $47 a barrel after an industry
report said U.S. inventories increased, reviving concerns that a
three-year supply glut is far from over.

The market was also gauging the impact of a global
ransomware attack that disrupted computers at banks and large
companies.

Spectranetics jumped 26.6 percent to $38.50 after
Dutch healthcare company Philips agreed to buy the
company for $2.16 billion.

KB Home edged up 0.5 percent to $22.93 after the
homebuilder increased its full-year forecast.
(Reporting by Tanya Agrawal; Editing by Arun Koyyur)


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