US STOCKS-Wall St to fall at open on China rate hike, Apple

* China hikes interest rates, threat seen to global growth

* Nasdaq OMX rebalances Nasdaq 100, Apple shares fall

* ISM services sector data for March on tap

* Futures down: Dow 24 pts, S&P 5 pts, Nasdaq 16 pts
(Updates prices, adds Pringles deal)

By Rodrigo Campos

NEW YORK, April 5 (Reuters) – U.S. stocks were set to fall
at the open on Tuesday after China, a main source of global
growth, raised interest rates, while Apple shares fell after
the stock’s weighting 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’s economy is seen as negative
for global growth. For details see [ID:nL3E7F51LX].

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 a local news report. [ID:nLDE7340WP].

Stock index futures were 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 index (.NDX: Quote, Profile, Research), like the heavily traded
PowerShares QQQ Trust (QQQ.O: Quote, Profile, Research), to lower their holdings of
Apple. Apple fell 1.2 percent in premarket trading.

“In the short-term this is going to have a significant
impact and create additional volatility,” Pursche said, but “we
don’t see it as long-term disruptive to the growth and
performance of the individual securities.”

Shares of Microsoft Corp (MSFT.O: Quote, Profile, Research), whose weighting will
rise, gained 1.4 percent before the open.

S&P 500 futures (SPc1: Quote, Profile, Research) fell 5 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 24
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]

Procter & Gamble Co (PG.N: Quote, Profile, Research) said it will sell its Pringles
potato chips business to Diamond Foods Inc (DMND.O: Quote, Profile, Research) for $1.5
billion in stock, sending Diamond shares up 9.3 percent at
$62.51 before the open.

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 the index
slipping to 59.5 from 59.7 in February.

The S&P 500 faces strong technical resistance after closing
just shy of 1,333 for a second straight session on Monday, a
level it has not been able to breach at the close since
mid-February.

The level marks a doubling of the 12-year low hit in March
2009 and is not far from 1,344, the S&P’s 2011 high and its
highest since June 2008.

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

US STOCKS-Wall St to fall at open on China rate hike, Apple