August 20, 2019 / 1:18 PM / 3 months ago

US STOCKS-Wall street set for muted open, retail earnings mixed

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* Home Depot, Kohl’s rises after profit beat

* Elanco Animal Health drops on deal to buy Bayer’s unit

* Medtronic gains on FY forecast raise

* Futures up: Dow 0.05%, S&P 0.03%, Nasdaq 0.07% (Adds comment, details; Updates prices)

By Medha Singh

Aug 20 (Reuters) - Wall Street looked set to open little changed on Tuesday after three days of gains, with a mixed bag of retail earnings keeping investors guessing about the health of U.S. consumer demand.

After a stormy start to the month on worsening U.S.-China trade tensions, the three main indexes have rebounded sharply, with the S&P 500 and the Nasdaq erasing last week’s losses on signs Germany and China are considering stimulus.

A report late on Monday said White House officials are discussing the possibility of a temporary payroll tax cut in an effort to boost the economy. But a White House official rejected the report in comments to Reuters.

“Today just looks like a digestion day of recent gains and there is not a lot of news that would swing the market wildly in either direction,” said Aaron Clark, portfolio manager at GW&K Investment Management in Boston, Massachusetts.

Home Depot Inc cut its full-year sales forecast, citing the potential impact of the trade war on consumer spending, although its shares rose 2.6% as the company beat expectations for profit. Smaller rival Lowe’s Companies Inc , which reports later this week, was up 1.8%.

Department store operator Kohl’s Corp jumped 3.7% after reporting better-than-expected quarterly profit and revenue. Shares of rivals Macy’s Inc and Nordstrom Inc were marginally higher.

TJX Cos Inc fell more than 3% after off-price retailer posted same-store quarterly sales that fell short of estimates for the first time in more than a year.

All eyes this week will be on Wednesday’s release of minutes from the Federal Reserve’s July policy meeting and Chair Jerome Powell’s speech on Friday at the Jackson Hole central bankers’ conference.

Powell’s remarks will be closely monitored for hints if more policy easing is in store, against the backdrop of an escalating trade war and growing fears of recession, signaled by the inversion of the U.S. yield curve last week.

Even as Powell classified last month’s interest rate cut as a “mid-cycle” policy adjustment, traders are currently fully pricing in another rate cut in September.

“I don’t think Powell will have an overly dovish tone compared to what the markets are expecting ... The consumer, which is by far the largest piece of the U.S. economy, is still pretty healthy,” Clark said.

At 8:45 a.m. ET, Dow e-minis were up 14 points, or 0.05%. S&P 500 e-minis were up 0.75 points, or 0.03% and Nasdaq 100 e-minis were up 5.5 points, or 0.07%.

The benchmark S&P 500 fell as much as about 7% from its July record high last week, but is now down only about 3% from that level.

Medtronic Plc gained 4.5% after the medical device maker raised its full year adjusted profit forecast.

Elanco Animal Health slid about 7% on agreeing to buy Bayer’s veterinary drugs unit in a $7.6 billion cash and stock deal, creating the second largest animal health business. (Reporting by Medha Singh in Bengaluru Editing by Saumyadeb Chakrabarty)

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