* July consumer spending picks up slightly
* Major U.S. indexes set to end the week higher
* Freeport-McMoRan jumps after Icahn discloses stake
* Indexes down: Dow 0.41 pct, S&P 0.21 pct, Nasdaq 0.03 pct (Updates to open)
By Tanya Agrawal
Aug 28 (Reuters) - Wall Street opened lower on Friday, suggesting investors were wary of taking big positions into the weekend after days of tumultuous trading that featured both the market's worst day in four years and biggest two-day gain since the financial crisis.
Even so, the three major U.S. indexes looked set to end the week higher after a brutal selloff early in the week sparked by worries about the health of the Chinese economy.
"A lot of investors are looking for markets to calm down and are rebalancing their portfolios before going into the weekend," said Jeff Carbone, co-founder and managing partner of Cornerstone Financial Partners.
Investors are taking a wait-and-see approach before making big decisions, he said.
The recent market turmoil has led to strategists cutting their end-of-year forecasts for indexes. Data for August 20-26 showed a record $28 billion in outflows from equity funds.
Chinese stocks jumped more than 4 percent for the second day as authorities announced that pension funds managed by China's local governments will start investing 2 trillion yuan ($313 billion) as soon as possible in stocks and other assets.
At 9:36 a.m. ET (1336 GMT) the Dow Jones industrial average was down 68.35 points, or 0.41 percent, at 16,586.42, the S&P 500 was down 4.23 points, or 0.21 percent, at 1,983.43 and the Nasdaq composite was down 1.48 points, or 0.03 percent, at 4,811.22.
Nine of the 10 major sectors were lower with the financial index's 0.75 percent fall leading the decliners.
Data released on Friday showed U.S. consumer spending picked up a bit in July as households bought more automobiles, offering further evidence of strength in the economy.
The University of Michigan's final August reading of consumer sentiment index, scheduled to be released at 10 a.m. ET, is expected to come in at 93.0, higher than its preliminary reading of 92.9 earlier in the month.
Global stock market volatility has raised doubts over when the U.S. Federal Reserve will raise rates, particularly after New York Fed chairman William Dudley said on Wednesday the case for a September hike now appeared less compelling.
Despite the stronger-than-expected data released earlier this week, traders gave a one-in-four chance that the Fed would increase interest rates in September.
The Fed has said it will raise interest rates only when it sees a sustained recovery in the economy. While the labor market has continued to gain strength, inflation remains below the Fed's 2 percent target.
"We don't think the Fed will raise rates this year. While the data has been improving, it doesn't show an over-heated economy, inflation remains low and we need to see the effect of low energy prices," Carbone said.
Freeport-McMoRan shares jumped 9.3 percent to $11.11 after activist investor Carl Icahn disclosed an 8.5 percent stake in the company.
Autodesk was down 5.1 percent at $47.60 after the maker of computer-aided design software cut its full-year profit and revenue forecast for the second time this year.
Big Lots was up 11.6 percent to $46.81 after its second-quarter profit beat expectations and the company raised its full-year adjusted profit forecast.
Declining issues outnumbered advancing ones on the NYSE by 1,523 to 1,071. On the Nasdaq, 1,183 issues fell and 1,072 advanced.
The S&P 500 index showed no new 52-week highs and no new lows, while the Nasdaq recorded seven new highs and six new lows. (Reporting by Tanya Agrawal; Editing by Saumyadeb Chakrabarty)