* Wal-Mart surges 8 pct as results beat estimates
* Fed minutes suggest possibility of June rate hike
* Weekly jobless claims fall 278,000 vs 275,000 est
* Futures down: Dow 38 pts, S&P 5 pts, Nasdaq 11.75 pts (Adds details, comment, updates prices)
By Yashaswini Swamynathan and Tanya Agrawal
May 19 (Reuters) - Wall Street was set to open slightly lower on Thursday after strong quarterly results from Wal-Mart and Cisco helped limit the losses sparked by a possibility of the Federal Reserve raising interest rates as early as next month.
Minutes of the Fed’s April meeting, released on Wednesday, caught the market by surprise as they showed that most policymakers thought a June rate hike was appropriate, given continued improvement in the U.S. economy.
Dow component Wal-Mart’s shares jumped 8.3 percent to $68.40 in premarket trading after the retailer reported first-quarter results that beat analysts’ estimates, in contrast with a string of weak results by competitors.
Cisco Systems was up 5.2 percent at $28.10 after the network equipment maker reported better-than-expected results.
“One of the drags on the market has been the retailer and some of the names yesterday and today that have done well has tempered some of those concerns,” said Ed Hyland, global investment specialist at JP Morgan Private Bank in Atlanta, Georgia.
Investors will be keeping a sharp eye for further clues regarding the trajectory of rate hikes when Fed Vice Chair Stanley Fischer speaks at a conference at 9:15 a.m. ET (1315 GMT) in New York. New York Fed president William Dudley is also scheduled to speak on the economy at a separate event at 10:30 a.m. ET.
On Wednesday, Wall Street erased gains in volatile trading and closed flat after Fed officials said they were more confident that inflation was rising and were less concerned about a global economic slowdown.
Following the release of the minutes on Wednesday, traders were projecting a 34 percent chance of the central bank raising rates in June, up from 15 percent on Tuesday, according to the CME FedWatch tool.
“The potential for a June rate hike has put the market on edge a little bit but we expect to see one in July and then another hike later in the year,” said Hyland.
S&P 500 e-minis were down 5 points, or 0.24 percent, with 204,112 contracts traded at 8:34 a.m. ET. Nasdaq 100 e-minis were down 11.75 points, or 0.27 percent, on volume of 25,399 contracts. Dow e-minis were down 38 points, or 0.22 percent, with 32,045 contracts changing hands.
The number of Americans filing for unemployment aid fell from a 14-month high last week, the latest sign that the economy was regaining speed after stumbling in the first quarter.
Initial jobless claims fell to 278,000, while economists were expecting a fall of 275,000.
Oil prices dropped more than 2 percent, falling for the second straight day on speculation of a rate hike and as U.S. inventories recorded an unexpected increase.
Advance Auto Parts slumped 10.3 percent to $129.02 after the auto parts retailer cut its full-year comparable sales forecast.
Monsanto was up 7.8 percent at $104.50 after disclosing German group Bayer has made an unsolicited takeover proposal. (Reporting by Yashaswini Swamynathan; Editing by Don Sebastian)