US STOCKS-Flat Wall St open seen as oil, Lowe's weigh

(Updates prices)

* U.S. front-month crude nears record, above $127

* Lowe's profit falls, outlook cut, stock slips early

* Microsoft pursues alternative deal with Yahoo

By Ellis Mnyandu

NEW YORK, May 19 (Reuters) - U.S. stocks were set to open little changed on Monday as near-record oil prices fueled caution about inflation and consumer spending, while Lowe's Companies (LOW.N: Quote, Profile, Research, Stock Buzz) added to concerns about the housing slump.

Lowe's, the second-largest U.S. home improvement chain, posted a drop in quarterly profit and slashed its full-year outlook, sending its stock down more than 2 percent before the bell to $23.91. For details see [ID:nWNAS4576].

Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) is among stocks to watch following news that the software maker had resumed talks with Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz), whose shares edged up 1.4 percent to $28.05 before the bell.

U.S. crude for June delivery CLc1 was up 87 cents, or nearly 1 percent, at $127.16 a barrel in electronic trade after ending at a fresh record above $126 on Friday on a weakening dollar.