US STOCKS-Wall St set to dip after 7-day rally; warning on Europe
* Euro zone crisis "not over," ECB official says
* Shares of Yum Brands rise on China restaurant sales
* Retailer Costco posts stronger-than-expected profit
* Futures off: Dow 19 pts, S&P 2.2 pts, Nasdaq 6 pts
By Chuck Mikolajczak
NEW YORK, March 12 (Reuters) - U.S. stocks were poised to open flat to lower on Tuesday as investors paused after a seven-session string of gains and the Bundesbank's chief warned the euro zone's crisis has not ended.
Both the Dow and benchmark S&P 500 index have rallied for seven consecutive sessions, with the Dow closing at another record high on Monday and the S&P within 10 points of its all-time closing high of 1,565.15 set on Oct. 9, 2007.
Any pullback may be short-lived, however, as investors have been using recent dips as a buying opportunity.
Sounding a note of caution in Europe, Jens Weidmann, head of Germany's central bank and a member of the European Central Bank's governing council, said the euro zone's "crisis is not over despite the recent calm on financial markets," adding that the region's economic stability remains on shaky ground.
"The thought is they have their problems and they are working on those problems, just as we did," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago.
On Wall Street investors' confidence has grown, leading to a gain of more than 10 percent for the year by the Dow and more than 9 percent by the S&P. Signs of improvement in the economy and the Federal Reserve's quantitative easing have helped to drive the gains.
The boost in confidence was reflected in the Chicago Board Options Exchange Volatility Index, Wall Street's so-called fear gauge, which dropped to its lowest level since February 2007 on Monday.
"The data has been improving. No horror stories out of Europe at the moment, and China is on the mend. There is nothing out there that tells you anything besides 'stay long and be long,'" said Lesh.
S&P 500 futures fell 2.2 points and were slightly 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 lost 19 points, and Nasdaq 100 futures shed 7.5 points.
Merck shares jumped 4.4 percent to $45.60 in premarket action after the pharmaceutical company said an independent monitoring board had allowed it to continue with a large trial assessing the safety and effectiveness of its Vytorin cholesterol treatment.
Retailer Costco Wholesale Corp posted a 39 percent increase in quarterly profit, beating expectations, on increasing sales, membership fees and a tax benefit related to a special cash dividend. Costco shares gained 1.4 percent to $103.90 in premarket trade.
Yum Brands Inc advanced 5.8 percent to $71.80 in premarket trade after the parent company of the KFC restaurant chain reported an unexpected rise in February sales in China.
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