US STOCKS-China rate hike, Apple weigh on futures

* China raises interest rates for fourth time since Oct.

* Nasdaq OMX rebalances Nasdaq 100, Apple shares fall

* ISM services sector data on tap

* Futures down: Dow 18 pts, S&P 3.2 pts, Nasdaq 16 pts
(Rewrites first paragraphs, adds upcoming economic data,
comment, byline)

By Rodrigo Campos

NEW YORK, April 5 (Reuters) – U.S. stock index futures fell
on Tuesday after China, a main source of global growth, raised
its interest rates, while Apple shares fell after the stock’s
weight in a widely followed index was cut.

China’s central bank increased interest rates for the
fourth time since October, raising suspicions that data next
week may show inflation rose more than expected in March. Any
move to curb overheating in China is seen as negative for
global growth.

Also clouding the outlook for the global economy,
Portugal’s credit rating was downgraded again on Tuesday. The
country’s biggest banks threatened to stop buying government
debt, according to local news reports.

Futures are being dragged lower by “China raising its
interest rates and a spike in concern over European weakness,”
said Oliver Pursche, president at Gary Goldberg Financial
Services in Suffern, New York.

Apple Inc (AAPL.O: Quote, Profile, Research) had its weighting cut in a rebalancing
of shares in the Nasdaq 100, forcing some to sell the iPhone
maker’s stock. Once the rebalancing is effective on May 2, the
projected weight of Apple will be 12.33 percent of the index
compared with its current 20.49 percent, Nasdaq OMX (NDAQ.O: Quote, Profile, Research)
said on its website. For details see [ID:nL3E7F510G].

The rebalancing requires sponsors of exchange traded funds
which track the Nasdaq 100 (.NDX: Quote, Profile, Research), like the heavily traded
PowerShares QQQ Trust (QQQ.O: Quote, Profile, Research), to also lower their holdings of
Apple shares. Apple fell 1.5 percent in premarket trading.

“In the short-term this is going to have a significant
impact and create additional volatility,” Pursche said.

“We don’t see it as long-term disruptive to the growth and
performance of the individual securities.”

Microsoft Corp’s (MSFT.O: Quote, Profile, Research) weighting in the index will rise,
and its shares gained 1.7 percent before the open.

S&P 500 futures (SPc1: Quote, Profile, Research) fell 3.2 points and were below fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration of the
contract. Dow Jones industrial average futures (DJc1: Quote, Profile, Research) lost 18
points and Nasdaq 100 futures (NDc1: Quote, Profile, Research) dropped 16 points.

Other tech stocks in focus include Texas Instruments
(TXN.N: Quote, Profile, Research) after it launched a $6.5 billion takeover bid for
National Semiconductor Corp (NSM.N: Quote, Profile, Research), offering a 78 percent
premium. National Semi traded up 71.6 percent at $24.15
premarket. [ID:nN04281619]

Investors will scour the minutes from the latest meeting of
the Federal Reserve’s policy-setting committee. Fed Chairman
Ben Bernanke said a recent rise in U.S. inflation was driven
primarily by global commodity prices and was unlikely to
persist.

Economic news includes the release of the Institute for
Supply Management’s March services sector index at 10 a.m.
(1400 GMT). Economists in a Reuters survey forecast a reading
of 59.5 versus 59.7 in February.

The S&P 500 met tough resistance on Monday, failing to
break a level that has held since mid-February. It ended flat
even as a spate of deals and underlying strength in the economy
spurred optimism.

About 5.94 billion shares traded on the New York Stock
Exchange, NYSE Amex and Nasdaq, the lowest total of the year.
(Reporting by Rodrigo Campos; Editing by Kenneth Barry)

US STOCKS-China rate hike, Apple weigh on futures