By Tanya Agrawal
REUTERS - U.S. stocks rose in early afternoon trading on Wednesday, with investors counting down to the conclusion of the Federal Reserve's two-day meeting, where the central bank is widely expected to raise rates for the first time this year.
The Fed is scheduled to release its latest policy statement along with updated economic forecasts at 2 p.m. ET (1800 GMT). Fed Chair Janet Yellen is due to hold a press conference half an hour later.
Traders have priced in more than a 90 percent chance of a quarter point rate increase, according to Fed fund futures.
Attention is turning to whether the U.S. central bank will signal an even faster pace of monetary tightening this year than the current three rate hikes that it projected at the December policy meeting.
The U.S. economy has been strengthening, with the labor market nearing full employment and inflation perking up. Markets are also betting on a potential economic boost from President Donald Trump's proposed fiscal policies.
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"Overall expectations are largely priced in that we will have a hike today and the question will be if the Fed will be a little bit more hawkish," said Myles Clouston, senior director at Nasdaq Advisory Services in New York.
"If inflation heads in the right direction, four hikes may be warranted. The key here is the Fed really needs to stay ahead of the curve so that they're not in a difficult position where they have to raise too quickly."
At 13:13 p.m. ET the Dow Jones industrial average was up 65.41 points, or 0.31 percent, at 20,902.78 and the S&P 500 was up 10.72 points, or 0.45 percent, at 2,376.17.
The Nasdaq Composite was up 20.61 points, or 0.35 percent, at 5,877.43.
All 11 major S&P sectors were higher, with the energy index's 1.08 percent rise leading the gainers.
Oil prices rebounded on Wednesday, lifted by a surprise drawdown in U.S. inventories and data from the International Energy Agency suggested OPEC cuts should create a crude deficit in the first half of 2017. [O/R]
Shares of oil majors Exxon and Chevron were up about 0.6 percent.
Economic data showed U.S. retail sales registered their smallest increase in six months in February.
Other data showed consumer prices barely rose in February but the underlying trend remained consistent with rising inflation. The Labor Department said its Consumer Price Index ticked up 0.1 percent last month, after jumping 0.6 percent in January.
Apple was up 0.7 percent at $139.97 after RBC raised its price target on the company. The stock provided the biggest boost to the S&P and the Nasdaq.
Twitter was down 2.7 percent at $14.91 after a number of prominent accounts on the microblogging website were hacked.
Advancing issues outnumbered decliners on the NYSE by 2,246 to 612. On the Nasdaq, 1,968 issues rose and 831 fell.
The S&P 500 index showed 40 new 52-week highs and two new low, while the Nasdaq recorded 96 new highs and 35 new lows.
(Reporting by Tanya Agrawal; Editing by Anil D'Silva & Shri Navaratnam)