CORRECTED-US STOCKS-S&P 500 set for worst first quarter since 1938

(Corrects second bullet to say Dow set for worst "first
quarter" ever, not "worst quarter". The story was refiled to fix
a typo in paragraph 1.)
* Oil stocks gain on higher prices
* Dow set for worst first quarter ever
* China factory activity shows surprise expansion
* Futures down: Dow 0.75%, S&P 0.81%, Nasdaq 0.58%

By Uday Sampath Kumar and Medha Singh
March 31 (Reuters) - Wall Street was set to open lower on
Tuesday, with the S&P 500 headed for its worst first quarter
since 1938 as evidence grew of the scale of the damage caused by
the collapse in oil prices and business activity due to the
coronavirus.
Technology firms Apple Inc AAPL.O and Microsoft Inc
MSFT.O fell in premarket trading after a recent rally that was
spurred by investors looking for stocks likely to withstand an
economic hit.
Confidence in equity markets had crept back in the past
week, thanks to an unprecedented $10 trillion global monetary
and fiscal stimulus, but Wall Street's indicator of future
volatility .VIX is still close to levels last seen in 2008.
"There is still uncertainty so it's hard to say that we're
right back to going 'risk on' here," said Jack Janasiewicz,
portfolio manager at Natixis Investment Managers Solutions in
Massachusetts.
"It wouldn't be surprising if we get a little bit of
weakness in the markets over the next couple of weeks and
re-test or break the lows."
Sliding from the record highs of mid February, the Dow Jones
and S&P 500 indexes are now set to end the quarter more than 18%
lower from the start of the year as the health crisis deepens in
the United States and disrupts supply chains.
The declines have erased more than $5 trillion from the
value of S&P 500 firms in the first quarter, and investors fear
corporate defaults and more mass layoffs going in to the second
quarter.
The blue-chip Dow is on course for its biggest quarterly
percentage decline since 1987 and the tech-heavy Nasdaq is set
to close out its worst first three months of the year since
2008.
"It's the last day of the quarter, and it's been a quarter
to forget, a horrible quarter," said Peter Cardillo, chief
market economist at Spartan Capital Securities in New York.
"There is a good chance that the lower open can reverse
during the course of the day because bargain hunting is now
coming into the picture."
At 08:38 a.m. EDT, Dow e-minis 1YMcv1 were down 166
points, or 0.75%, S&P 500 e-minis EScv1 were down 21.25
points, or 0.81% and Nasdaq 100 e-minis NQcv1 were down 45.25
points, or 0.58%.
Oil stocks were among the big premarket gainers, boosted by
a rebound in prices from 18-year lows after the United States
and Russia agreed to discuss stabilizing energy markets. O/R
The energy sector has been the worst performer this year,
losing more than half its value.
Investors have so far largely shrugged off figures showing
the extent of the economic damage from the statewide lockdowns.
Consumer confidence data for March, due at 10 a.m. ET, is likely
to drop to a reading of 110 from 130.7 a month earlier.