March 21, 2019 / 12:58 PM / 3 months ago

US STOCKS-Wall St set for lower open after Fed's abrupt dovish turn

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* Fed sees no rate hikes in 2019

* Interest-rate sensitive banks fall premarket

* Micron up after co sees memory chip recovery coming

* Biogen tumbles after scrapping Alzheimer’s trial

* Futures down: Dow 0.39 pct, S&P 0.38 pct, Nasdaq 0.45 pct (Adds comments, background, updates prices)

By Amy Caren Daniel

March 21 (Reuters) - Wall Street’s main indexes were set to open lower on Thursday, after the Federal Reserve abandoned any interest rate hikes this year and flagged an expected slowdown in the economy.

Having downgraded their U.S. growth, unemployment and inflation forecasts, policymakers said the Fed’s benchmark overnight interest rate was likely to remain at the current level of between 2.25 percent and 2.50 percent at least through this year, a wholesale shift of their outlook.

“The fear factor here is how weak exactly is the economy, how afraid is the Fed at this point, because to make a 180 degree turn like they did is significant,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“They always kept the door open for another rate hike and now that window seems to be shut tight and that is spooking investors.”

Shares of U.S. lenders, which are sensitive to interest rates, fell in premarket trading. Citigroup Inc, Bank of America Corp and JPMorgan Chase & Co fell about 1 percent each.

In yet another sign of slowing growth, economic bellwether FedEx Corp on Tuesday cut its 2019 profit forecast for the second time.

However, expectations of the Fed remaining largely dovish and hopes of a resolution to the ongoing trade war between the United States and China have spurred a rally in stocks this year, with the S&P 500 now about 4 percent away from its record closing high in September.

Investors will now keep a close watch on trade talks between the United States and China as top U.S. officials travel to Beijing to resume negotiations.

President Donald Trump warned on Wednesday that Washington may leave tariffs on Chinese goods for a “substantial period” to ensure that Beijing complies with any trade agreement.

At 8:37 a.m. ET, Dow e-minis were down 101 points, or 0.39 percent. S&P 500 e-minis were down 10.75 points, or 0.38 percent and Nasdaq 100 e-minis were down 33 points, or 0.45 percent.

Among stocks, Biogen Inc tumbled 26.5 percent after the drugmaker and its Japanese partner, Eisai Co Ltd, said they would discontinue two studies testing an Alzheimer’s drug.

Micron Technology Inc rose 3.2 percent after the chipmaker said it sees a recovery in the memory chip market coming.

Boeing Co slipped 0.6 percent after pressure mounted on the world’s largest planemaker in Washington as U.S. lawmakers called for executives to testify about two crashed 737 MAX jets.

Conagra Brands Inc jumped 7 percent after the food packaging company’s quarterly profit topped estimates. (Reporting by Amy Caren Daniel, Medha Singh and Shreyashi Sanyal in Bengaluru; Editing by Anil D’Silva)

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