February 16, 2018 / 2:13 PM / a month ago

US STOCKS-Wall St set to open flat on last day of a strong week

* Coca-Cola, Deere gain after strong results

* Jan. homebuilding data jump to more than 1-year high

* Futures dip: Dow 10 pts, S&P 1.25 pts, Nasdaq 1.25 pts

* So far this week: Dow, S&P up over 4 pct, Nasdaq 5.6 pct (Adds comment, details, updates prices)

By Sruthi Shankar

Feb 16 (Reuters) - Wall Street was set to open little changed on Friday, but is on course to end with strong weekly gains, cementing its pull back from last week’s sell-off as investors shrug off inflation fears and focus on growth in the economy and corporate profits.

By 8:44 a.m. ET, Dow e-minis had lost 10 points, S&P 500 e-minis were down 1.25 points and the Nasdaq 100 e-minis fell 12.5 points.

The benchmark S&P 500 index’s 4.3 percent gain since Monday has put it on track for its best week since January 2013. Its pullback from last week’s sell-off has been accompanied by low volatility, encouraging economic data and corporate reports.

The Dow Jones Industrial Average is set for its best week since November 2016, with a 4.2 percent gains, while the Nasdaq Composite’s 5.6 percent gain since Monday has set it on course for its strongest week since December 2011.

“A long-term uptrend in the market is viable given how strong economic fundamentals and earnings are. What’s a caused a rebound from the correction is just that we’re simply back on that trend,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

Shares of Coca-Cola rose 2.3 percent in premarket trading after the soda maker’s cost-saving initiatives helped its beat fourth-quarter profit estimates.

Deere & Co rose 0.94 percent after the tractor maker reported a 23 percent jump in quarterly revenue as its key markets improved.

Economic data also painted a healthy picture. Homebuilding increased to more than a one-year high in January, boosted by a rebound in the construction of single-family housing units.

Housing starts jumped 9.7 percent to a seasonally adjusted annual rate of 1.326 million units, the highest level since October 2016, the Commerce Department said.

Beside strong quarterly earnings, investor sentiment has also got a boost from expectations that more growth is still to come due to newly-implemented corporate tax cuts and plans to increase infrastructure spending.

Nearly 77 percent of the S&P 500 companies that have reported fourth-quarter results so far have topped earnings estimate, above the 72 percent average beat-rate of the past four quarters.

Many companies have boosted their forecasts and analysts now expect S&P 500 companies to increase their earnings per share in 2018 by 18.9 percent, according to Thomson Reuters I/B/E/S.

After falling by more than 10 percent from their record highs on Jan. 26 on concerns about rising borrowing costs due to a pick up in inflation, the S&P has gained 5.8 percent since last Friday.

Some traders have said the market was also reassured by a decline in the CBOE Volatility index - a measure of implied near-term volatility on the S&P 500, also known as Wall Street’s “fear gauge”.

On Thursday, the VIX dropped below 20 points for the first time since hitting a two-and-a-half-year high of 50.3 last week, while yields on the benchmark U.S. 10-year Treasury bonds hit a more than four-year high of 2.9440 percent.

But, the rising yields this week has not pressured stocks like they did last week. The 10-year yields slipped to 2.8822 percent on Friday. (Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D’Souza)

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