US STOCKS-Futures point to continued rally, but oil dips
* Dow and S&P 500 coming off seven weeks of gains
* Oil falls after Iran deal, energy shares may be pressured
* FDA approves Johnson & Johnson's hepatitis C drug
* Futures up: Dow 58 pts, S&P 5.6 pts, Nasdaq 11 pts
NEW YORK, Nov 25 (Reuters) - U.S. stock index futures rose on Monday, suggesting major averages would extend a rally that has taken them to repeated all-time highs, though energy shares will be in focus amid a sharp decline in crude oil prices.
Trading is expected to be light this week, with markets closed Thursday for Thanksgiving, and closing early on Friday. The light action could increase market volatility. The CBOE Volatility index is down more than 30 percent this year, and is at historically low levels, which could make it vulnerable to a spike.
The Dow Jones industrial average and S&P 500 have rallied in recent months, closing out their seventh straight week of gains last week. Both indexes closed at records on Friday, with the S&P closing above 1,800 for the first time.
The gains have largely come on expectations that the U.S. Federal Reserve will maintain its stimulus program through the year-end. While the program is expected to provide a floor under equity prices for as long as it continues, the scale of the rally has some investors looking for a pullback amid few catalysts. The S&P is 1.4 percent above its 14-day moving average, which could serve as support in a correction.
"It won't take much for these gains to fade given the rally we've seen, especially in such a slow week," said Jeff Duncan, chief executive of Duncan Financial Management in St. Louis. "The Fed is holding steady, but a lot of investors have become complacent, buying for no real fundamental reason."
U.S. crude futures fell 1.3 percent after a breakthrough nuclear deal between world powers and Iran over the weekend eased oil supply fears. Brent crude fell 1.6 percent.
The decline in the price of oil could weigh on energy companies, though it may benefit other segments of the economy, like consumer spending. U.S. shares of BP Plc fell 0.6 percent in premarket trading.
"Less tension in the Middle East is always a positive, and any drop in gas prices will essentially act as a tax break for consumers going into the holiday shopping season," Duncan said. "This is a real benefit for the economy."
S&P 500 futures rose 5.6 points and were above 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 added 58 points and Nasdaq 100 futures rose 11 points.
Wall Street's rally comes just ahead of December, which has been the best month for both the Dow and the S&P since 1950. If the trend continues, it would add to the S&P's 26.5 percent jump so far in 2013, the best year for the index since 1998.
In company news, the Food and Drug Administration on Friday approved the use of Johnson & Johnson's Olysio as a treatment for the hepatitis C virus. Shares of the Dow component added 25 cents in light premarket trading.
Hewlett-Packard Co investors have grown concerned about a possible slowdown in Chinese demand, which previously has hit tech giants IBM and Cisco Systems Inc.
Dow component Boeing Co late Friday advised airlines about a risk of engine-icing problems on its new 747-8 and 787 Dreamliner planes with engines made by General Electric ; it urged 15 carriers to avoid flying them near high-level thunderstorms.