* ISM manufacturing, construction spending data on tap
* Moody's changes EU rating outlook to negative
* Spain, Italy yields fall as ECB speculation grows
* S&P down 0.3 pt, Dow up 9 pts, Nasdaq off 2.25 pts
By Angela Moon
NEW YORK, Sept 4 (Reuters) - Wall Street was set for a flat
open on Tuesday as investors returned after a long weekend, with
focus on U.S. manufacturing data and an upcoming meeting of
European Central Bank policymakers.
Moody's Investors Service has changed its outlook on the Aaa
rating of the European Union to negative, warning it might
downgrade the bloc if it decides to cut the ratings on Germany,
France, UK and Netherlands.
The Institute for Supply Management releases its August
manufacturing index at 10:00 a.m. ET (1400 GMT). Economists
expect a reading of 50.0, versus 49.8 in July.
The Commerce Department releases July construction spending
numbers at 10:00 a.m. ET (1400 GMT). Economists forecast a rise
of 0.4 percent, a repeat of the June increase.
S&P 500 futures fell 0.3 point and were in line with
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 gained 9
points, while Nasdaq 100 futures lost 2.25 points.
"Expectations for QE3 seem to suggest it will be happening
sooner, rather than later. However, Wall Street is taking a
guarded stance toward the markets ahead of this morning's
manufacturing report," said senior options strategist Tony
Venosa at Schaeffer's Investment Research.
In Europe, Spanish and Italian government bond yields fell
after the head of the European Central Bank hinted at the scope
of a much-anticipated bond buying program.
The ECB is expected to unveil its debt-purchasing plan to
tackle the region's debt crisis at a policy meeting on Thursday,
where it may also cut rates as the 17-nation euro area heads
toward a recession.
European shares were lower, however, having already risen
strongly on hopes that central bank action could start the
fightback against the euro zone's chronic debt problems.
But the "positive mood remains intact on account of still
high expectations that the ECB will unveil further detail of the
timetable surrounding purchases of short-dated government bonds
in secondary markets in response to official requests going
forward," said Andrew Wilkinson, chief economic strategist at
Miller Tabak & Co. LLC.
On Monday, China's official purchasing managers' index fell
below the 50 level that demarcates expansion from contraction
for the first time since November 2011, while a similar survey
from HSBC showed activity shrinking at its fastest pace since
Xerox Corp and a wholly-owned unit that contracted
with Texas to process dental claim forms are being investigated
to see if they helped allow dentists to submit
higher-than-required bills under the state's Medicaid system,
the Wall Street Journal reported.
U.S. Secretary of State Hillary Clinton has pledged to take
a strong message to Beijing this week on the need to calm
regional tensions over maritime disputes that have raised
broader fears of military friction between the two major Pacific
U.S. stocks rose on Friday after Federal Reserve Chairman
Ben Bernanke, expressing "grave concern" for the stagnating U.S.
job market, said the central bank was prepared to take further
steps to strengthen the economy if necessary.