By Sruthi Shankar
REUTERS - U.S. stocks were little changed in early afternoon trading on Wednesday as investors awaited the Federal Reserve's policy decision for clues on the future path of interest rates.
The policy statement and projections are due to be released at 2 p.m. ET (1800 GMT). Investors will closely follow Fed Chair Janet Yellen's press conference for views on inflation.
The central bank is likely to keep interest rate unchanged and say that it will start unwinding its holdings of about $4.2 trillion in bonds and mortgage-backed securities.
The Fed will also update its rate path or "dot plot," which will be used to evaluate whether another rate increase in December is likely.
Inflation has remained below the Fed's 2-percent target rate, but a recent data showed uptick in domestic consumer prices, which raised the chances of a December rate hike by more than 50 percent for the first time since July.
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"The Fed is continuing to confirm the narrative that the lack of inflation has been somewhat transitory and expect inflation to pick up," said Emily Roland, head of investment research at John Hancock Investments in Boston.
"Certainly that will have a big influence as we look towards the readings on inflation going forward."
Traders were betting on a 55.8 percent chance of a December hike, compared with 37.3 percent a month ago, according to the CME Group's FedWatch tool.
At 12:59 p.m. ET, the Dow Jones Industrial Average was up 20.98 points, or 0.09 percent, at 22,391.78, the S&P was up 1.44 points, or 0.06 percent, at 2,508.09 and the Nasdaq Composite was down 6.00 points, or 0.09 percent, at 6,455.33.
The S&P and the Dow moved in narrow ranges but managed to scale new record highs, helped by industrial, consumer discretionary and energy stocks. The tech-heavy Nasdaq, however, was pulled slightly lower by a drop in Apple.
Shares of the iPhone maker fell 2 percent on reports that the company admitted to connectivity issues with its latest smartwatch.
The energy index's 0.75 percent rise led eight of the 11 major S&P advancers. Oil prices rose nearly 2 percent after the Iraqi oil minister said OPEC and its partners were considering extending or deepening output cuts. [O/R]
The technology index was the biggest laggard, falling 0.45 percent, weighed down by Apple, Broadcom and Adobe.
Adobe fell 3.7 percent after the Photoshop maker's revenue forecast came in line with estimates.
General Mills was down about 6 percent after its quarterly profit missed estimates, hurt by lower sales of its yogurts and cereals in North America.
Western Digital slipped 4.8 percent after Toshiba agreed to sell its semiconductor business to a group led by private equity firm Bain Capital.
Bed Bath & Beyond sank more than 15 percent to its lowest since 2009 after the home furnishing retailer reported earnings and sales below estimates, prompting a slew of price target cuts.
Advancing issues outnumbered decliners on the NYSE by 1,809 to 968. On the Nasdaq, 1,711 issues rose and 1,116 fell.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)