US STOCKS-Futures flat, few incentives to buy; S&P 500 off record

Reuters - UK Focus

* Biotech stocks edge up, continuing recent rally

* Digital Ally (NasdaqCM: DGLY - news) gains before bell, has tripled this month

* Futures up: Dow 22 pts, S&P 2.5 pts, Nasdaq 6 pts

By Ryan Vlastelica

NEW YORK, Aug 26 (Reuters) - U.S. stock index futures werelittle changed on Tuesday, with investors finding few reasons tobuy after a rally in the previous session that took the S&P 500above 2,000 for the first time.

* The S&P failed to hold that level on Monday, though thebenchmark index ended at a new closing high. Equities haverallied lately, with both the Dow and S&P advancing in seven ofthe last 10 sessions, while the Nasdaq has climbed in eight ofthe last 10 trading days.

* That momentum is still considered intact, and the S&P'sprice-to-earnings ratio is within historical norms, leading manyanalysts to believe the market is not overvalued. Nonetheless,further gains may be a challenge without positive catalysts andamid potential headwinds such as a reduction in Federal Reservestimulus and a simmering conflict between Ukraine and Russia.

* Much of the market's recent gains have come on low volume,suggesting many traders may be reluctant to jump in at currentlevels.

* S&P 500 e-mini futures rose 2.5 points and wereabove fair value, a formula that evaluates pricing by takinginto account interest rates, dividends and time to expiration onthe contract. Dow Jones industrial average e-mini futures added 22 points and Nasdaq 100 e-mini futures added 6 points.

* Biotechnology stocks were among the biggest drivers duringMonday's rally. That appeared to continue Tuesday, withAchillion Pharmaceuticals (NasdaqGS: ACHN - news) up 6.1 percent to $11.44before the opening bell. Gilead Sciences Inc (NasdaqGS: GILD - news) rose 0.6percent to $108.13.

* Shares (Frankfurt: DI6.F - news) of Best Buy Co Inc fell 4.7 percent to$30.50 in premarket trading after the electronics retailerreported lower second-quarter revenue and forecast a drop insame-store sales in the second half of the year.

* Digital Ally Inc jumped 6.4 percent to $13.30 inpremarket trading, extending a recent surge that has seen sharesof the wearable camera maker more than triple this month alone.The recent fatal police shooting of an unarmed black teenager inMissouri has fueled interest in the company's devices. The stockwas the Nasdaq's heaviest premarket mover.

* Inc late Monday agreed to buy the live-streaming gaming network Twitch Interactive for about $970million in cash.

(Editing by Bernadette Baum)

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