* Investors fret the market's rally is waning * Home prices rise for fourth-straight month in August * Futures: S&P off 0.1 pt, Dow up 9 pts, Nasdaq off 2.75 pts
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By Leah Schnurr
NEW YORK, Oct 27 (Reuters) - Wall Street was set for a modestly lower open on Tuesday as worries the market's seven-month rally was reaching an end offset data showing U.S. home price rose more than expected.
The Case-Shiller 20-city home price index rose for the fourth-straight month in August, adding to signs of economic stability in the United States. But some investors have become concerned that such signs of improvement could prompt central banks to withdraw stimulus measures sooner than expected.
"Since Case-Shiller is a broader spectrum, this speaks positively to the idea of price increases across the board," said Craig Peckham, equity trading strategist at Jefferies & Co in New York. "It's hard to view this as anything other than a net positive."
Energy shares could get support after BP Plc beat third-quarter earnings forecasts by a big margin as its cost-cutting program proved more successful than expected, prompting the oil major to increase its target for savings for the year.
Exxon Mobil Corp gained 0.7 percent to $73.75 in premarket trades. Diversified manufacturer Textron Inc rose 18.36 percent to $18.80 after it posted an unexpected profit.
S&P 500 futures fell 0.1 of a point and were about even with 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 gained 6 points, while Nasdaq futures were off 2.75 points.
But the Nasdaq could see pressure as Baidu Inc skidded 19.3 percent to $349.31 before the bell after China's top search engine said a rocky introduction for its new system to sell search-based advertising will hit its business into the first quarter of next year.
Investors have become increasingly fearful about when governments around the world will eventually withdraw stimulus measures, waiting to see if the global economy can stand up on its own.
Indeed, some countries have already begun tightening monetary policy. Overnight, India's central bank laid the groundwork for a rise in interest rates, while earlier in the month Australia became the first G20 country to raise rates coming out of the financial crisis.
Stocks were hit by similar worries on Monday as investors ditched home builders and financials on fears lawmakers may let a federal home buyer tax credit expire.
Consumer confidence data for October is on tap at 10:00 a.m. (1400 GMT) The index is expected to be flat with September's level at 53.1, according to a Reuters survey of economists.