Wall Street little changed as investors assess earnings

Wall Street was little changed on Tuesday morning as investors assessed a host of corporate earnings reports and braced for the Federal Reserve's policy meeting.

The Federal Open Market Committee (FOMC) begins a two-day meeting later in the day to decide whether the U.S. economy is strong enough to absorb an interest rate hike.

The central bank, which will announce its decision at 2:00 p.m. ET on Wednesday, is not expected to pull the trigger on interest rates in the near term as inflation remains below its 2% target and global growth continues to sputter.

Traders have priced in an 18.7% chance of a rate increase in September and a 42.8% chance in December, according to CME Group's FedWatch tool.

Investors are also awaiting earnings from key companies such as Apple and Twitter, which are set to report results later in the day.

Strong economic data, an improvement in quarterly earnings and low expectations of a rate hike have spurred Wall Street to record highs in the past two weeks.

"Earnings continue to beat expectations on an adjusted basis but I think the markets will wait to hear what central bankers have to say tomorrow," said John Brady, senior vice president at R.J. O'Brien & Associates in Chicago.

"While investors do not seem to care that earnings have been lower, the U.S. equity market remains the tallest midget in the crowd," Brady added.

Of the 129 S&P 500 companies that have reported earnings as of Monday, 68% topped analysts' estimates. In a typical quarter, 63% of companies beat expectations, according to Thomson Reuters data.

At 9:40 a.m. ET the Dow Jones Industrial Average was up 5.55 points, or 0.03%, at 18,498.61. Three of its six components that reported results, including Verizon and 3M, were lower on weak results.

The S&P 500 index was up 2.2 points, or 0.1%, at 2,170.68.

The Nasdaq Composite index was up 8.66 points, or 0.17%, at 5,106.29.

Seven of the 10 major S&P sectors were higher, led by a 0.5% rise in technology stocks.

McDonald's shares dropped 3.4% to $123, after the restaurant chain's comparable sales missed analysts' expectations. The stock weighed the most on the Dow.

Texas Instruments shares rose 6.6% after its current quarter forecast beat analysts' estimates. The stock provided the biggest boost to the S&P.