* Credit thaw underpins sentiment before election day
* Manufacturing data eyed, automakers to post sales
* Wal-Mart rises after broker upgrade
(Recasts first paragraph, updates prices)
By Ellis Mnyandu
NEW YORK, Nov 3 (Reuters) - U.S. stocks headed for a flat
open on Monday as caution ahead of key economic data offset
signs of more thawing in credit markets.
Trading was likely to be light as Americans prepare to head
to the polls on Tuesday to choose the next U.S. president, with
investors sidelined ahead of the outcome of the elections.
Wal-Mart Stores <WMT.N>, up nearly 2 percent before the
bell, is among stocks to watch after a brokerage raised its
rating on the retailer.
Shares of Goldman Sachs <GS.N> slipped 0.5 percent to $92
before the bell after Merrill Lynch forecast the U.S. bank to
post a fourth-quarter loss instead of the profit that Merrill
had previously forecast.
The costs for bank to borrow dollars from each other again
fell, sending three-month rates down for a 17th straight day
and boosting hopes that steps to restore confidence in credit
markets are paying off.
Free-flowing credit is seen as crucial in helping avert an
acute downturn as investors fret about a global recession.
"The fact that interbank rates are really coming down is an
indication that we should begin to see the credit markets
respond and that's going to be the key," said Peter Cardillo,
chief market economist at Avalon Partners in New York.
He added that the market has probably discounted an
election victory of Democrat Barack Obama, heading into
Tuesday's U.S. presidential election.
"It looks like we will have a Democratic president, so the
election and the anticipation of the economic data is probably
going to keep the market in a very tight range for most of the
session today and tomorrow as we go to the polls."
S&P 500 futures <SPc1> shed 2.40 points and were about even
with fair value, a formula to evaluate pricing by taking into
account interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures <DJc1> dipped 22
points and Nasdaq 100 <NDc1> futures shed 2.00 points.
Monday's economic diary includes the Institute for Supply
Management October manufacturing index at 10 a.m. (1400 GMT).
Economists in a Reuters survey expect a reading of 41.5 versus
43.5 in September. But the highlight of the week will be
Friday's report on October U.S. nonfarm payrolls.
J.P. Morgan Securities raised Wal-Mart Stores Inc <WMT.N>,
a Dow component, to "overweight" from "neutral." Goldman Sachs
added Boeing <BA.N> to a "conviction sell" list, according to
theflyonthewall.com.
Obama heads into Tuesday's voting in a comfortable
position, with Republican opponent John McCain struggling to
overtake his lead in every national opinion poll and to hold
off his challenge in about a dozen states won by President
George W. Bush in 2004.
Obama leads McCain in six of eight key battleground states,
including the big prizes of Florida and Ohio, according to a
series of Reuters/Zogby polls released on Monday.
Obama holds a 7-point edge over McCain among likely U.S.
voters in a separate Reuters/C-SPAN/Zogby national tracking
poll, up 1 percentage point from Sunday. The telephone poll has
a margin of error of 2.9 percentage points. [].
U.S. stocks ended one of their worst months on record on
Friday but signs of further thawing in credit markets sparked a
search for bargains.
(Editing by James Dalgleish)
