US STOCKS-Wall St set for muted open as private payrolls jump

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* U.S. private payrolls increase by 692,000 in June - ADP

* Virgin Galactic slips after BofA Global downgrades stock

* Futures down: Dow 0.13%, S&P 0.11%, Nasdaq 0.06% (Adds comment, details; updates prices)

June 30 (Reuters) - Wall Street’s main indexes were set for a muted open on Wednesday, looking to wrap up their fifth straight quarter of gains as data showed U.S. private payrolls increased solidly in June even as hiring slowed.

The ADP National Employment Report showed private payrolls increased by 692,000 jobs this month, down from 886,000 additions in May as companies continued to scramble to find workers to meet surging demand as the economy’s reopening gains momentum.

The Labor Department’s more comprehensive and closely watched employment data for June is due on Friday, and market participants fear a strong reading could force the U.S. Federal Reserve to pare back its ultra-loose monetary policy.

“The monthly Bureau of Labor Statistics report has disappointed for the last two months. A third disappointment would cement the fact that the economic gains are starting to lose momentum,” said John Brady, senior vice president at R.J. O’Brien & Associates in Chicago.

Prospects of a transitory spike in inflation has pushed the benchmark S&P 500 and the Nasdaq to a series of record highs in recent sessions, helped by a comeback in tech-heavy growth stocks.

The S&P 500 has climbed about 14.3% in the first half of the year and is set for its second best first-half performance since 1998, with energy, financials, real estate and communication services stocks notching the best performance at the sectoral level.

The S&P growth index which houses mega-cap names Apple Inc, Amazon, Facebook Inc and Microsoft Corp, has jumped nearly 11.9% this quarter, outperforming its value peer and narrowing the gap for the year-to-date performance.

“The second half of the year could certainly bring in an increase in volatility depending on what Fed policy does. Does the Fed taper? Does inflation go higher?” Brady said.

At 8:40 a.m. ET, Dow e-minis were down 46 points, or 0.13%, S&P 500 e-minis were down 4.75 points, or 0.11%, and Nasdaq 100 e-minis were down 9 points, or 0.06%.

Shares of Micron Technology, which is expected to post quarterly results after markets close, rose 2.1% as they headed for their fourth straight monthly decline.

Virgin Galactic Holdings fell 5.1% after BofA Global Research downgraded billionaire Richard Branson’s spaceship company’s stock to “underperform” from “buy”.

Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Maju Samuel