Wall Street to dip at the open after weekly gains; volatility eyed

NEW YORK (Reuters) - U.S. stocks were set to dip at the open on Monday following strong gains in major indexes the previous week, as investors assessed gyrations in the dollar and crude prices and their impact on equities.

Traders will likely keep an eye on the robust U.S. dollar as the Federal Reserve is seen tightening monetary policy some time later this year, diverging from most major central banks which are easing policy. The 20-day correlation between the dollar index <.DXY> and S&P 500 e-mini futures sits at -0.8. The dollar index was down 0.5 percent on the day.

The surging dollar is one of the biggest headwinds to the earnings of multinational U.S. corporations. Some analysts are concerned about a possible earnings recession.

"The market has been in a back and forth motion for the last couple of weeks, caught between the potential for rising interest rates and its impact on the dollar and the feeling by investors that the economy is gaining some strength," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.

He said equity traders were "maybe a little bit too focused" on the daily dollar moves and the impact of a stronger greenback on earnings was not entirely clear.

Brent dropped 0.5 percent to just above $55 a barrel and U.S. crude down 1.4 percent to $45.92, after top exporter Saudi Arabia said it would only mull cutting output if producers outside OPEC do so.

S&P 500 e-mini futures were down 1 point and fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract, indicated a slightly lower open. Dow Jones industrial average e-mini futures <1YMc1> fell 4 points and Nasdaq 100 e-mini futures lost 2 points.

Investors also eyed a meeting between German Chancellor Angela Merkel and Greek Prime Minister Alexis Tsipras in Berlin.

Gilead Sciences shares fell 2 percent in premarket trading. A report by Bloomberg said the company told healthcare providers nine patients taking its hepatitis C drugs Harvoni or Sovaldi, along with a heart treatment, developed abnormally slow heartbeats and one died of cardiac arrest.

Immunogen rallied 23 percent in premarket trading after it licensed Japan-based Takeda Pharmaceutical <4502.T> to develop and commercialize anticancer therapies.

The Nasdaq Biotech index <.NBI> is up nearly 20 percent from its February low and has been key in the Nasdaq Composite's attempt to set a new record. The NBI has risen in the last eight sessions.

The Nasdaq Composite rose 3.2 percent last week, closing about 2 percent below its record high set 15 years ago during the dot-com bubble.

(Editing by Bernadette Baum)

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