Wall St. set to open lower as GDP misses expectations

(Reuters) - U.S. stocks were set to open lower on Thursday after data showed that the U.S. economy grew at a slower-than-expected pace in the second quarter even as the Federal Reserve left doors open for a possible rate hike in September.

Gross domestic product expanded at a 2.3 percent annual rate, the Commerce Department said, but economists had expected a 2.6 percent rise.

The numbers come a day after the Fed said the U.S. economy and job market continue to strengthen.

The Fed has maintained near-zero interest rates for nearly a decade and has said it will raise rates only when it sees a sustained recovery in the economy.

"There is a disconnect between what the Main Street is seeing and what the Fed is telling us," said Adam Sarhan, chief executive of Sarhan Capital.

"If the economy isn't meeting expectations at near zero percent interest rates, then how is it going to grow when the Fed does raise rates? The numbers are a direct contradiction to what the Fed is telling us."

Adding to the pressure, the number of Americans filing new applications for unemployment benefits increased last week but remained near cycle lows.

U.S. stocks closed stronger on Wednesday after the Fed statement. The S&P 500 has bounced about 2 percent higher in the past two days following a near-3 percent drop over the preceding week that had been caused in part by a rout in China's stock markets.

S&P 500 e-minis were down 6.5 points, or 0.31 percent, with 149,904 contracts traded at 8:46 a.m. ET (1246 GMT). Nasdaq 100 e-minis were down 5 points, or 0.11 percent, on volume of 20,912 contracts while Dow e-minis <1YMc1> were down 44 points, or 0.25 percent, with 19,769 contracts changing hands.

More than halfway through the second-quarter earnings season, analysts expect overall earnings of S&P 500 companies to edge up 0.8 percent and revenue to decline 3.9 percent, according to Thomson Reuters data.

While earnings are expected to increase this quarter, valuations remain a concern. The S&P 500 is trading near 16.9 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.

Companies scheduled to report during the day include Expedia , LinkedIn and Western Union after the close.

Facebook shares fell 2.5 percent to $94.50 in premarket trading after the social media company's quarterly profit fell due to higher costs.

T-Mobile's was up 3.2 percent at $38.25 after its quarterly revenue rose about 14 percent as aggressive pricing helped the company win more customers.

Procter & Gamble fell 1.8 percent to $79.15 after he world's largest consumer products maker reported its sixth straight fall in quarterly sales.

Whole Foods Market slumped 11.3 percent to $36.28 after same-store sales growth cooled.

Skechers USA jumped 12.1 percent to $144 as the sports shoe maker and retailer reported a better-than-expected rise in quarterly revenue.

(Editing by Don Sebastian)

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