* Oil below $119 a barrel buoys sentiment
* Fed set to decide on rates, policy statement eyed
* Reading on vast U.S. services sector on tap
* Procter & Gamble beats estimates, but outlook weighs
(Updates with start of Fed meeting, adds ISM services index
forecast, updates prices)
By Ellis Mnyandu
NEW YORK, Aug 5 (Reuters) - U.S. stocks headed for a higher
open on Tuesday as a sharp slide in oil prices calmed inflation
concerns and buoyed optimism that consumers and businesses
would continue to spend, supporting profit growth.
U.S. crude oil futures <CLc1> slid nearly 2 percent to
below $119 a barrel, a welcome boost as Federal Reserve
policy-makers meet in Washington to decide interest-rate policy
and give their assessment of the U.S. economy.
The health of the vast services sector will be in the
spotlight when the Institute for Supply Management reports on
its non-manufacturing index for July at 10 a.m. (1400 GMT).
Shares of energy-consuming sectors, including airlines and
industrial companies, are likely be among the market's gainers,
along with retailers' stocks if the decline in oil prices
continues.
"Oil is a huge catalyst, along with a stronger dollar,"
said Matt McCall, president of Penn Financial Group in Denver,
Colorado. "With energy prices going down, I see money coming
into all the other areas of the market, including technology
and financials."
S&P 500 futures <SPc1> rose 7.90 points and were above fair
value, a formula that evaluates pricing taking into account
interest rates, dividends and time to expiration on the
contract.
Dow Jones industrial average futures <DJc1> were up 71
points and Nasdaq 100 <NDc1> climbed 14 points.
Shares of technology companies, which thrive on both
consumer and corporate spending, will also be among the
beneficiaries of falling oil prices, analysts said.
Apple Inc <AAPL.O>, a tech bellwether and the maker of the
iPod and iPhone, rose 1.2 percent to $155.06 before the bell
after UBS started the stock with a "buy" rating, according to
theflyonthewall.com
Among financials, shares of Citigroup <C.N> , the largest
U.S. bank, rose 2.2 percent, to $19.25 before the bell.
In earnings news, Procter & Gamble Co <PG.N> posted a
stronger-than-expected fiscal fourth-quarter profit, but the
consumer goods maker projected profit for the fiscal year begun
July 1 that could trail the average Wall Street estimate. P&G
shares were little changed before the opening bell.
The Fed is widely expected to keep interest rates unchanged
at 2 percent, but investors will scrutinize its policy
statement on signs of mounting price pressures and the impact
on the economy. An announcement is expected around 2:15 p.m.
(1815 GMT).
The ISM services index is forecast to show a median rise to
48.5 from 48.2 in June, according to a Reuters survey.
(Editing by Kenneth Barry)
