* NY Fed’s August manufacturing activity hits lowest since 2009
* Oil prices head towards six-year lows
* Zulily soars on Liberty Interactive’s $2.4 bln buyout offer
* Tesla jumps after Morgan Stanley upgrade
* Futures off: Dow 65 pts, S&P 8 pts, Nasdaq 15 pts (Adds details, updates prices)
By Tanya Agrawal
Aug 17 (Reuters) - Wall Street was set to begin the week lower on Monday as oil prices fell towards six-year lows and data indicated that manufacturing activity in New York state contracted in August.
Energy stocks could come under after data showed Japan’s economy contracted and U.S. producers added drilling rigs for a fourth straight week despite a recent rout in prices.
The New York Fed’s Empire State general business conditions index tumbled from 3.86 in July to -14.92 in August due to steep drops in new orders and shipments. Economists polled by Reuters had expected the index to rise to 5 this month. A reading above zero indicates expansion.
With the U.S. earnings season at the flag end and no major economic data due, investors will turn to Wednesday’s minutes of the most recent Federal Reserve meeting for indications on how the U.S. central bank will react to the recent yuan devaluation and the further decline in oil prices.
The dollar index was little changed at $96.79 and has been mostly higher on hopes that the Fed is readying to raise rates at its mid-September meeting.
S&P 500 e-minis were down 8 points, or 0.38 percent, with 177,673 contracts traded at 8:47 a.m. ET.
Nasdaq 100 e-minis were down 15 points, or 0.33 percent, on volume of 27,509 contracts.
Dow e-minis were down 65 points, or 0.37 percent, with 22,779 contracts changing hands.
U.S. stocks ended a volatile week higher on Friday after upbeat U.S. economic data and as euro zone finance ministers agreed to launch a third bailout program for Greece.
Data expected on Monday includes the NAHB/ Wells Fargo Housing Market index, which is expected to show an increase to 61 from 60 in July, which was the highest since November 2005. The data is expected at 10 a.m. ET (1400 GMT).
With 92 percent of the S&P 500 companies having reported so far, second-quarter earnings are expected to have edge up 1.2 percent, while revenue is expected to have fallen 3.5 percent, according to Thomson Reuters data.
Cisco shares fell 1.2 percent to $28.69 in premarket trading after Morgan Stanley downgraded the stock to “equal-weight” from “overweight”.
Tesla Motors rose 5.6 percent to $256.75 after Morgan Stanley raised its price target on the stock to $465 from $280 and said Tesla was its top pick among U.S. automakers.
Zulily soared 49.8 percent to $18.85 after John Malone’s Liberty Interactive said it would buy the online retailer for $2.4 billion. Liberty was up 3.1 percent at $31.20.
Estee Lauder fell 2.2 percent to $87.17 after the cosmetics maker reported lower-than-expected quarterly sales.
KKR fell 3.6 percent to $22.03 after its subsidiary Samson Resources said on Friday it expects to file for bankruptcy protection.
Companies scheduled to report after the close of market include Urban Outfitters and Agilent Technologies . (Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D‘Souza)