Wall Street little changed as countdown to Fed decision begins

By Tanya Agrawal

(Reuters) - U.S. stocks were off their highs and were little changed in afternoon trading on Wednesday as investors turned their attention to the outcome of the Federal Reserve's policy meeting.

The Fed is widely tipped to lift rates 25 basis points, but investors are likely to pay close attention to Fed Chair Janet Yellen's tone and new forecasts for clues on policymakers' thinking on how President-elect Donald Trump's policies will impact growth and inflation.

The last rate increase was a year ago, when the Fed moved rates from the near-zero levels reached during the 2007-2009 financial crisis. All 120 economists in a recent Reuters poll expect a rate hike.

The announcement is due at 2 p.m. ET (1900 GMT), followed by Yellen's news conference 30 minutes later.

"The most important thing that investors will be looking at is the interpretation of the commentary from the Fed," said Michael Scanlon, managing director of Manulife Asset Management.

"I think the market is pricing in about two hikes for 2017 but if the Trump administration is able to reduce corporate taxes, I wouldn't be surprised to see four hikes next year."

U.S. stocks have been on a tear since the election, fuelled by expectations that Trump will reduce taxes and regulation and stimulate the economy.

The Dow, which has risen about 9 percent since Nov. 8, is less than a 100 points away from the 20,000 mark.

At 13:07 p.m. ET the Dow Jones Industrial Average was down 0.3 points, or 0 percent, at 19,910.91, the S&P 500 was down 0.8 points, or 0.03 percent, at 2,270.92 and the Nasdaq Composite was up 1.43 points, or 0.03 percent, at 5,465.26.

Eight of the 11 major S&P sectors were lower, with the energy index's <.SPNY> 0.72 percent drop leading the decliners.

Oil prices fell about 2 percent on renewed concerns about an oil glut sparked by rising U.S. crude inventories in storage.

Oil major Exxon declined 1.3 percent and was the biggest drag on the Dow.

The healthcare index <.SPXHC> declined 0.18 percent, weighed down by a 3.6 percent fall in Express Scripts after the pharmacy benefit manager signalled that scrutiny into drug pricing isn't going away. The stock was also the biggest drag on the Nasdaq.

The Nasdaq biotechnology index <.NBI> was lower by 0.35 percent after the U.S. government filed charges in a generic drug price-fixing probe.

Generic drugmakers, such as Mylan , Endo International and Teva Pharmaceutical , fell between 2.2 and 4.2 percent.

Hertz Global dropped 7.1 percent to $23.34 after the car rental company said on Tuesday it would replace its chief executive and reduce its board size.

Declining issues outnumbered advancers on the NYSE by 1,791 to 1,106. On the Nasdaq, 1,885 issues fell and 891 advanced.

The S&P 500 index showed 15 new 52-week highs and one new low, while the Nasdaq recorded 84 new highs and 35 new lows.

(Reporting by Tanya Agrawal; Editing by Sriraj Kalluvila)