* Oil slips as supply worries dissipate
* Lowe's tops Q2 estimates, stock inches up
* Geopolitical worry ebbs after Musharraf's resignation
* JPMorgan advises short energy, buy financials
(Recasts first paragraph, updates prices)
By Ellis Mnyandu
NEW YORK, Aug 18 (Reuters) - U.S. stocks headed for a
higher open on Monday as oil prices retreated and an easing of
geopolitical concerns surrounding Pakistan's government
underpinned sentiment.
U.S. front-month crude backed off from an earlier $115.35 a
barrel as supply fears related to Tropical Storm Fay ebbed. The
storm was set to miss major offshore oil and gas production in
the Gulf of Mexico and appeared to be targeting the west coast
of Florida.
Stronger-than-expected profit from Lowe's Cos Inc <LOW.N> ,
the No. 2 U.S. home improvement chain, also added to the
positive tone. Lowe's shares rose 2.2 percent to $25.05.
Earlier they had dipped 2 percent before the bell because the
company's forecast for third-quarter earnings missed
expectations.
The resignation of Pakistan's beleaguered President Pervez
Musharraf eased worries of political turmoil in the
nuclear-armed country. For details, see [].
"We were a little higher in oil prices earlier, and oil now
seems to have come off a little bit, which helps the tone,"
said Peter Cardillo, chief market economist at Avalon Partners
in New York. "The other positive is that the geopolitical
concerns we had last week are beginning to wane."
S&P 500 futures <SPc1> rose 4 points and were above 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 <DJc1> climbed 25
points and Nasdaq 100 <NDc1> futures gained 7 points.
Lowe's reported a lower second-quarter profit as consumers
took on fewer big-ticket remodelings during the housing slump,
but the company still beat analysts' estimates on profit and
sales.
Broadcom Corp <BRCM.O> shares jumped 3 percent to $28.30
before the bell after Barron's newspaper said in a report the
stock could gain as much as 40 percent as the chip-maker grabs
part of the "smartphone" market. []
In housing-related news, the U.S. Treasury is increasingly
likely to recapitalize home finance providers Fannie Mae
<FNM.N> and Freddie Mac <FRE.N> in the months ahead on the
taxpayer's dime, Barron's newspaper said in its Aug. 18
edition. Fannie shares fell 8.3 percent to $7.25 and Freddie
shares dropped 8.6 percent to $5.35 before the bell.
[]
Even so, J.P. Morgan Securities' U.S. equity strategists
said they saw opportunity in going "short" energy and "long"
financials, as capital flows and macro developments are likely
to be less favorable to energy relative to financials.
Analysts led by Thomas Lee downgraded the U.S. energy
sector to "neutral" from "overweight," and said the next two
years will see a shift toward a long financials trade.
[]
U.S. crude oil futures <CLc1> fell 25 cents to $113.54 a
barrel.
Musharraf, the former army chief and firm U.S. ally, has
seen his popularity slide over the past 18 months and has been
isolated since his allies lost a February election. He
announced his resignation on Monday.
(Editing by Kenneth Barry)
