Wall St. set to open higher as selloff eases

(Reuters) - Wall Street was set to open higher on Wednesday, a day after the S&P 500 snapped a three-day losing streak as a selloff in the equities market took a breather.

U.S. stocks ended flat on Tuesday as financial and consumer staples stocks bounced.

Applications for U.S. home mortgages rose last week, while interest rates hit their highest level since November 2014, data released on Wednesday showed.

Investors continue to await on the timing of the first rate hike since 2006 by the U.S. Federal Reserve as economic data point to a recovering U.S. economy, which had come to a standstill in the first quarter.

The Fed has said it will raise rates once it sees evidence that the economy is improving. Last week, May employment report showed that the labor market continued to strengthen.

"The market will drift for a while as clients look for fresh new investment ideas and wait for the next quarterly earnings season," said Brian Fenske, head of sales trading at ITG in New York.

"The big story is still the rate hike and how the world will react when it is eventually announced."

European shares also snapped a six-day losing streak, with German equities rebounding from their lowest level since February as traders said the recent selloff had gone too far.

U.S. bond prices slipped as they were hit by this week's flood of supply, sending the 10-year U.S. benchmark bond yield to an eight-month high of 2.458 percent.

The U.S. dollar index <.DXY> hit a three-week low, with analysts pointing to debate around the G7 summit regarding the speed of the dollar's rise as the U.S. prepares to end years of cheap central-bank cash.

S&P 500 e-minis were up 6 points, or 0.29 percent, with 175,600 contracts traded at 8:50 a.m. ET, while Nasdaq 100 e-minis were up 7.5 points, or 0.17 percent, on volume of 29,802 contracts and Dow e-minis <1YMc1> were up 42 points, or 0.24 percent, with 26,777 contracts changing hands.

HCC Insurance Holdings shares rose 3 percent to $77 in premarket trading after Tokio Marine Holdings <8766.T> said it had agreed to buy U.S. specialty insurer for $7.5 billion.

Netflix was up 1 percent to $654 a day after shareholders approved a massive increase in the number of shares the company is authorized to issue, the first step toward a possible stock split.

Francesca's Holdings slumped 10.5 percent to $87.77 after the women's apparel and accessories retailer reported lower-than-expected quarterly sales and forecast second-quarter profit and sales below analysts' estimates.

Johnson Controls rose 4.1 percent to $53.66 after the auto parts maker said it was exploring strategic options for the separation of its automotive business.

(Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty)

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