US futures imply flat open

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WallStreet1234 REUTERS The US bourse is set to open higher as European leaders get ready to meet.

New York - US stock index futures pointed to a flat open on Monday, with investors finding few reasons to keep pushing shares higher, with the Dow and S&P 500 at record levels.

* Equities have been strong performers lately, with the Dow and S&P ending their fourth straight monthly rise in May and the Nasdaq up for its third straight week last week.

However, those gains have recently come on anemic volume, a trend that looks to continue Monday, suggesting the rise lacks conviction.

* Investors continue to watch the yield of the US Treasury 10-year note, which remains near an 11-month low.

Low yields could help boost dividend-paying stocks, including in the telecom and utility sectors.

* The CBOE Volatility index continues to hover around lows not seen since March 2013.

That the so-called “fear index” is so low has many, including officials at the Federal Reserve, concerned the market is complacent.

* S&P 500 futures rose 1.3 point and were above 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 added 15 points and Nasdaq 100 futures rose 2 points.

* Roughly 83,600 S&P 500 e-mini contracts traded as of 8:20 a.m. (13:00 SA time), suggesting limited action on Monday.

Trading may be light until the European Central Bank's June 5 meeting, when many anticipate it will announce a loosening of monetary policy.

* Traders are also looking ahead to data on construction spending and manufacturing.

Spending is seen up 0.6 percent in April while the Institute for Supply Management's May read on manufacturing is seen rising to 55.5 from 54.9.

* Ariad Pharmaceuticals Inc was one of the Nasdaq's most active premarket movers, jumping 12 percent to $7.25 in heavy volume, a day after saying its drug ponatinib showed anti-tumor activity in patients with advanced gastrointestinal stromal tumors.

* Pharmacyclics Inc rose 8.4 percent to $96.30 in premarket trading after late-stage study findings showed that its drug Ibrutinib, which treats the most common form of leukemia in adults, improved survival for patients whose disease had worsened despite standard treatment.

Pharmacyclics sells the drug with Johnson & Johnson.

* In deal news, Japanese insurer Dai-ichi Life is in advanced talks to buy Protective Life Corp in a deal that could be worth over $5 billion.

Late Friday, Valeant Pharmaceuticals International Inc said it would boost its takeover bid for Allergan Inc for the second time in a week, lifting it to $53.8 billion from $49.9 billion.

* Broadcom Corp shares jumped 13 percent to $35.98 on heavy premarket volume after the company said it was looking to sell or wind-down its cellular baseband business. - Reuters

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