US STOCKS-U.S. stocks set to open flat ahead earnings season

* 2nd-qtr earnings kick off this week

* Dollar touches 2-month high

* Yellen to testify later in the week

* Futures: Dow down 26 pts, S&P flat, Nasdaq up 4.25 pts
(Adds details)

By Sweta Singh

July 10 (Reuters) – Wall Street looked set to open little
changed on Monday as investors gear up for the second-quarter
earnings to justify frothy market valuations.

The week marks the beginning of the earnings season and
investors will be looking at reports on Friday from big U.S.
banks including JPMorgan Chase, Wells Fargo and

In a significant victory for the banking industry, the Fed
late last month approved plans from the 34 largest U.S. banks to
use extra capital for stock buybacks, dividends and other

“I think what’s happening today is the markets are in a
wait-and-see approach ahead of the next big catalyst, which is
earnings season,” said Adam Sarhan, chief executive officer at
50 Park Investments in Florida.

“The way I see what’s happening today is just a little bit
of rotation occurring where you’re selling leadership and you’re
buying undervalued, or you’re hunting for value.”

The three major indexes are trading close to record levels,
boosted by strong economic data and robust corporate performance
in the first quarter.

Markets closed on a high on Friday after a payrolls report
gave investors more confidence in the strength of the U.S.

Nonfarm payrolls increased by 222,000 jobs last month, a
report by the U.S. Labor Department showed on Friday. It was the
second biggest increase this year and topped economists’
expectations for a 179,000 gain.

The dollar climbed to a two-month high against the Japanese
yen on Monday as a robust jobs data propped up U.S. Treasury

Federal Reserve Chair Janet Yellen’s semi-annual testimony
is the key highlight of this week for investors looking for cues
on further rate hikes. She will testify on Wednesday and

Dow e-minis were down 26 points, or 0.12 percent,
with 18,594 contracts changing hands.

S&P 500 e-minis remained unchanged, with 116,746
contracts traded. Nasdaq 100 e-minis were up 4.25 points,
or 0.08 percent, on volume of 30,058 contracts.

On the stocks, Abercrombie & Fitch shares were down
13.3 percent at $10.54 premarket after the teen apparel retailer
terminated discussion on a potential deal following a review.

Shares of ClubCorp were up 30.5 percent at $17.10
after the owner of private golf and country clubs got a takeover
offer from private equity firm Apollo Global Management LLC
(Reporting by Sweta Singh; Additional reporting by Anya
Tharakan in Bengaluru; Editing by Arun Koyyur)