Futures flat as oil rally pauses

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[December 06, 2016]  By Yashaswini Swamynathan

(Reuters) -
U.S. stock index futures were little changed on Tuesday, a day after the Dow closed at a record high, as a rally in oil prices lost steam.

Brent crude slipped 0.3 percent to $54.80, its first decline in five days as output rose in every major region despite plans by OPEC and Russia to cut production. The commodity has risen more than 18 percent since the output limit agreement was announced last week. [O/R]

U.S. stocks have climbed since the Nov. 8 election, fueled by expectations of significant economic stimulus and cuts in corporate taxes and regulations under President-elect Donald Trump.

However, the rally has split, with the Dow marking a series of record highs due to gains in industrials and bank stocks, while sectors such as utilities and technology names have held back the S&P 500 and the Nasdaq.

The Federal Reserve has been preparing the markets for higher interest rates encouraged by a spate of strong economic data. Traders currently see a whopping 92 percent chance of a move when the central bank meets next Tuesday and Wednesday, according to Thomson Reuters data.

The central bank has entered a self-imposed quiet period until its news conference on Dec. 14.

Data scheduled on Tuesday includes a report on trade deficit, which is expected to have risen to $41.8 billion in October, compared to a deficit of $36.4 billion the previous month. The data is due at 8:30 a.m. ET (1330 GMT).

The Commerce Department issues a report on factory orders data for October at 10:00 a.m. ET. The report is likely to show new factory goods orders rose 2.6 percent in the month after adding 0.3 percent in September.

Wall Street closed higher on Monday, with the Dow setting new record intraday and closing highs, buoyed by strong services data and gains in technology stocks.

Shares of Starwood Property fell 4.6 percent to $21.85 in premarket trading after the REIT priced a second stock offering at a discount to its previous close.

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., December 5, 2016. REUTERS/Brendan McDermid

Pandora rose 4.6 percent to $13.99 after brokerage Aegis Capital initiated coverage on the online radio company's stock with a "buy" rating and a $16 price target.

DryShips surged 12.8 percent to $5.19 after Morgan Stanley reported a passive 6.1 percent stake.

Futures snapshot at 6:59 a.m. ET:

Dow e-minis were up 2 points, or 0.01 percent, with 16,276 contracts changing hands.

S&P 500 e-minis were up 0.75 points, or 0.03 percent, with 101,365 contracts traded.

Nasdaq 100 e-minis were up 3.25 points, or 0.07 percent, on volume of 10,625 contracts.

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

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