By Chuck Mikolajczak
NEW YORK (Reuters) - Stocks were set for a lower open on Monday before a report on December factory orders, and the major indexes were poised for a pullback after the S&P 500 hit a five-year high and the Dow rose above 14,000 last week.
The benchmark S&P index <.SPX> is up more than 6 percent for the year, with nearly half of the gains coming in the session after U.S. legislators successfully sidestepped temporarily the "fiscal cliff" of automatic tax increases and spending cuts, which threatened to derail the economic recovery.
The gains on Friday left the benchmark S&P 500 roughly 60 points away from its all-time intraday high of 1,576.09.
The Dow's march above 14,000 was the highest October 2007.
"We should get a pullback. Markets have been on a tear and they have been on a tear for good, sound economic and earnings-driven reasons," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
Investors will look to December factory orders data for signs of economic improvement. Economists in a Reuters survey expect a rise of 2.2 percent compared with an unchanged reading in December.
Economic data has pointed to a modest U.S. recovery, but the data has not been strong enough to upset investor expectations the Federal Reserve will continue its stimulus policy that has buoyed stocks.
"We are right on that razor's edge, so to speak, where there is not enough robust profile in the economic data to suggest the Fed needs to change policy, but at the same time people are aware that there is a shelf life on this policy and as we continue to sit on that fence, the markets move higher," said Kenny.
Shares of household products company Clorox <CLX.N> rose 0.9 percent to $79.90 in premarket trading after the company's quarterly profit beat analysts' estimates as a severe flu season boosted sales of disinfecting wipes.
Earnings are due from Anadarko Petroleum Corp <APC.N> and Yum! Brands Inc <YUM.N>, owner of fast-food chains.
S&P 500 futures fell 7.2 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 68 points, and Nasdaq 100 futures shed 14.5 points.
According to Thomson Reuters data, of the 252 companies in the S&P 500 that have reported earnings through Friday, 69 percent have reported earnings above analyst expectations compared with the 62 percent average since 1994 and the 65 percent average over the past four quarters.
S&P 500 fourth-quarter earnings are expected to rise 4.4 percent, according to the data. That estimate is above the 1.9 percent forecast at the start of earnings season, but well below the 9.9 percent fourth-quarter earnings forecast on October 1.
Oracle Corp <ORCL.O> lost 2.2 percent to $35.40 in premarket action after the company agreed to buy network gear maker Acme Packet Inc <APKT.O> for about $1.9 billion. Acme Packet shares jumped 21.9 percent to $29.16 before the opening bell.
Herbalife Ltd <HLF.N> slumped 8.8 percent to $32 before the open after The New York Post reported the seller of weight loss products is facing a probe by the Federal Trade Commission.
Wal-Mart Stores Inc <WMT.N> shed 1.2 percent to $69.65 in premarket trading after JP Morgan lowered its rating on the world's largest retailer to "neutral" and reduced its price target to $75 from $84 per share.
Chevron Corp <CVX.N> dipped 0.9 percent to $115.47 in premarket trade after UBS cut its rating on the Dow component to "neutral.
(Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Kenneth Barry)
(c) Copyright Thomson Reuters 2013. Check for restrictions at: http://about.reuters.com/fulllegal.asp