* Fitch cuts Italy credit rating after election impasse
* China data show uneven economic recovery, policy dilemma
* Dell, Icahn enter into confidentiality agreement
* S&P 500 less than 1 pct away from all-time closing high
* Futures: S&P off 1.2 pts; Dow up 1 pt, Nasdaq off 4.5 pts
By Angela Moon
NEW YORK, March 11 (Reuters) - Wall Street was set for a flat to slightly lower open on Monday as a credit downgrade of Italy and disappointing data from China curbed investors' enthusiasm.
The cautious mood followed last week's rally that took the Dow to record highs. The S&P 500 climbed for a sixth straight day on Friday and ended nine of the past 10 weeks higher. All three major U.S. stock indexes racked up the biggest weekly gains since the first week of the year.
European shares dipped on Monday as investors digested Fitch's downgrade of Italy on account of political stalemate.
China's uneven economic recovery signals a looming dilemma for policymakers as official data over the weekend showed inflation at a 10-month high in February while factory output and consumer spending were weaker than forecast.
But analysts said stocks still had momentum to rise, with the S&P 500 now less than 1 percent away from its all-time closing high.
"The market may advance more slowly that in previous weeks, but there are numerous bullish signs, including the fact that hedge funds continue to buy into the market," said Todd Salamone, director of research at Schaeffer's Investment Research.
Deals will remain at the forefront of investors' minds.
Icahn Enterprises LP said it had entered into a confidentiality agreement with Dell Inc and looked forward to commencing a review of the company. Dell shares were up 1.1 percent in premarket trade.
AT&T Inc is considering buying a 25 percent stake in India's Reliance Jio Infocomm Ltd, a telecommunications venture controlled by billionaire Mukesh Ambani, for $3.5 billion, the Times of India newspaper said. AT&T shares were down 0.2 percent at $36.60 in premarket trading.
S&P 500 futures fell 1.2 points and were below 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 were up 1 point, while Nasdaq 100 futures lost 4.5 points.
Genworth Financial Inc shares rose nearly 9 percent in premarket trading following a report by Barron's that the mortgage insurer's stock could almost double in the next year, boosted by gains in mortgage and healthcare pricing.
Dick's Sporting Goods Inc shares fell 8 percent in premarket trade after the retailer reported lower-than-expected fourth-quarter results.
Merck & Co will be in the spotlight after data released on Saturday showed unexpected serious side effects in niacin, a heart drug aimed at raising good HDL cholesterol.
Wall Street commodity revenues crashed last year to their lowest on record, as tighter regulation and limited price swings squeezed the once dominant traders of Goldman Sachs Group Inc , JPMorgan Chase & Co and Morgan Stanley.
U.S. stocks closed out a historic week with another day of gains on Friday, as the Dow hit yet another record closing high on a payrolls report that surpassed even the most optimistic forecasts.