* Kennametal, 3M slump after forecast cuts
* Qualcomm up on raised guidance
* Valeant up on distribution deal with Walgreens
* Futures up: Dow 119 pts, S&P 18 pts, Nasdaq 35.5 pts (Adds details, comments, updates prices)
By Abhiram Nandakumar
Dec 15 (Reuters) - U.S. stock indexes were set to open higher on Tuesday as crude oil prices recovered from near 11-year lows and ahead of a widely expected increase in interest rates later in the week.
The U.S. Federal Reserve begins a two-day policy meeting later in the day to decide on rates, with a statement scheduled for Wednesday.
Traders see an 83 percent chance of a liftoff this week, according to the CME Group’s FedWatch program, but investors are concerned about the pace of future rate hikes.
A free fall in prices of oil and other commodities has also taken a toll on the junk bond market over the past week, with some high-profile funds forced to halt redemptions as yield spreads ballooned.
“It’s been hard to predict where the market is going on a day-to-day basis,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
Brown said he expects trading to be slightly volatile as traders set up positions ahead of the Fed’s statement, adding that an increase in rates was largely priced in.
“It will really be a shock to the market if (the Fed) didn’t move,” he said.
At 8:47 a.m. ET (1347 GMT), Dow e-minis were up 119 points, or 0.69 percent, with 7,952 contracts changing hands. S&P 500 e-minis were up 18 points, or 0.89 percent, with 205,288 contracts traded. Nasdaq 100 e-minis were up 35.5 points, or 0.78 percent, on volume of 13,808 contracts.
U.S. economic data showed consumer prices were unchanged in November after rising 0.2 percent in October.
Global stocks rose on Tuesday, while the dollar index fell marginally, as crude oil prices recovered from near 11-year lows.
Amgen shares were up 1.6 percent at $160.63 in premarket trading. The drugmaker said on Monday that it would reacquire sales rights to three of its products from GlaxoSmithkline.
Valeant Pharmaceuticals was up 5.5 percent at $99.30 after the Canadian drugmaker entered into a distribution deal with Walgreens. Walgreens was up 1.6 percent.
Qualcomm was up 2.3 percent at $47.91 after the company raised its first-quarter earnings forecast and decided against separating its chipmaking and technology licensing businesses.
Kennametal slumped 18.7 percent to $20.80 after it cut its 2016 profit and revenue forecasts, citing weakness and volatility in its core markets and lower oil prices.
3M was down 4 percent at $151.40 after cutting its 2015 profit outlook. (Reporting by Abhiram Nandakumar and Aastha Agnihotri in Bengaluru; Editing by Anil D‘Silva)