US STOCKS-Futures slip ahead of open on Merck, ADP; Fed on tap
* Merck shares off 5 pct in premarket after results
* U.S. private sector adds 119,000 jobs in April -ADP
* U.S. Fed expected to maintain $85 bln/month in bond buys
* Futures: S&P down 2.1 pts; Dow off 23 pts; Nasdaq up 2 pts
By Angela Moon
NEW YORK, May 1 (Reuters) - Wall Street was set for a slightly lower open on Wednesday, weighed by weak results from Merck and as investors waited to hear from the U.S. Federal Reserve on the state of the economy.
U.S. stock index futures cut modest gains to trade negative following a jobs report that showed U.S. private employers added 119,000 jobs in April, well below economists' expectations, in the latest piece of data to suggest the economy is encountering a soft patch.
"Overall the employment report suggests the pace of economic growth is ticking over below par at this stage, something corroborated by weakening demand from the euro zone," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York.
In earnings, Merck & Co Inc reported lower-than-expected first quarter sales, as generic competition hurt demand for its Singulair asthma drug and the stronger dollar hit overseas sales. The stock was down 5.1 percent in premarket trade.
The U.S. Federal Reserve, which is holding a two-day policy meeting, announces its latest decision at 2 p.m. EDT (1800 GMT) and the European Central Bank follows on Thursday. The Fed is likely to keep its foot on the stimulus pedal, especially after disappointing economic data.
Expectations of more action to boost growth, in particular anticipation of an interest rate cut by the ECB, have helped European shares rally more than 3 percent from mid-April lows.
S&P 500 futures fell 2.1 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures lost 23 points while Nasdaq 100 futures added 2 points.
"The Fed will be the key today. I expect them to acknowledge that the economy has slowed down, and if anything, that will reinforce the notion that the Fed stimulus will be around till the end of the year," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
The S&P 500 closed out its sixth straight month of gains, its longest winning streak since September 2009, with investors using any pullback as a buying opportunity.
The benchmark index hit a new intraday high in the last minutes of trading on Tuesday, following a session in which moves were slight as investors found few reasons to extend recent gains.
In focus is the 1,600 level on the S&P 500 Index.
"We got back to 1,596 yesterday, so I think the psychological resistance is still in place," said Bryan Sapp, senior trading analyst at Schaeffer's Investment Research.
Chesapeake Energy Corp reported a quarterly profit that topped Wall Street expectations on Wednesday, helped by lower production expenses and higher oil and natural gas prices. The stock was up 4.3 percent in premarket trade.
Shares of MasterCard fell 2 percent premarket after the world's second-largest credit and debit card network reported a 8.4 percent increase in revenue but fell short of the average analyst estimate.
DreamWorks Animation SKG Inc shares were up 10 percent in premarket trade following upgrades from a number of brokerages after reporting earnings late Tuesday.
The Institute for Supply Management's gauge of manufacturing, due at 10:00 a.m. EDT, is likely to show a reading of 50.9 for April, according to Reuters survey, compared to the previous month's reading of 51.3.