* Hewlett-Packard profit forecast tops estimates
* Fed's Lockhart sees decision soon on stimulus
* Futures down: Dow 16 pts, S&P 2.1 pts, Nasdaq 0.25 pts (Updates market activity, recasts)
By Edward Krudy
NEW YORK, Sept 29 (Reuters) - Wall Street was set to open lower on Wednesday as caution after a strong rally in September offset some positive signs on U.S. corporate earnings and the Chinese manufacturing sector.
Technology shares could get a boost after Hewlett-Packard Co forecast profit above estimates, while Family Dollar Stores Inc posted solid profits and may help retail shares.
The HSBC China Purchasing Managers' Index rose to a five-month high, pointing to renewed, though moderate, momentum in the vast industrial sector, the backbone of the country's economy and a driver of global growth.
Nick Kalivas, an analysts at MF Global in Chicago, said gains could be limited after the market run-up this month, but he remained generally optimistic.
"It's probably a little bit of a limit to the upside, but it's not a reason that would make me bearish. It just would make me not aggressive on the upside," he said.
S&P 500 futures fell 2.1 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 16 points, and Nasdaq 100 futures fell 0.25 points.
The S&P 500 has climbed over 9 percent since the beginning of the month on signs of stabilization in the economy and on new hopes the Federal Reserve will further stimulate the economy. With that tailwind, the market has shown a tendency to drift higher in the absence of bad news.
Rick Meckler, president of investment firm LibertyView Capital Management in New York, said a pattern of selling at the open followed by gains later in the day could emerge as it did in the last session, he said.
"It (the rally) creates a little bit of nervousness and early-morning profit-taking. Today looks like that as well," he said. "But I would expect that at least some time today there will be another run at continuing to make new recent highs."
Hewlett-Packard's forecast helped to reassure investors after the sudden departure of its chief executive. HP shares rose 1 percent to $42.27 in premarket trade.
Family Dollar's better-than-expected earnings and the retailer's bullish forecast reinforced the view that cash-strapped consumers are grabbing bargains on everyday items. The shares rose 4.5 percent to $45.27 premarket.
Propping up hopes of near-term action by policymakers, Dennis Lockhart, president of the Atlanta Federal Reserve Bank, said the central bank will have to decide in the coming weeks whether it should do more to support the economy.
In a reminder of the weak housing market, U.S. mortgage applications fell for a fourth straight week, reflecting the inability of many homeowners to take advantage of record low interest rates, data from an industry group showed.
Gold prices rallied to record highs again on fears that moves by the U.S. Fed to tackle the sluggish economy would undermine the dollar and boost investment in bullion as an alternative asset. Spot gold hit a record $1,313.20 an ounce.