Wall Street off its lows 30 minutes before Fed decision

By Tanya Agrawal

REUTERS - U.S. stocks were off their lows 30 minutes before the Federal Reserve's interest rates announcement on Wednesday, as Apple clawed back some of its steep losses.

Apple's shares were down 6.2 percent at $97.91, making it the biggest drag on the three major indexes. They had fallen as much as 8.3 percent after the company reported its first revenue decline in over a decade.

Gains in Boston Scientific, Boeing and Mondelez also helped limit the losses.

Investors are awaiting a Fed decision on rates at 2 p.m. ET (1800 GMT). No change in rates is expected but the Fed may signal its intention to tighten policy this year.

"Investors are treading water right now," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

"I'm not anticipating a whole lot of change in the Fed's wording from their last meeting. I think that could lead to a sigh of relief and the market may move upwards." Forrest expects the central bank to raise rates once this year.

Economists polled by Reuters expect two increases this year but futures prices show traders do not expect rates to rise until late 2016, according to CME Group's FedWatch.

The Fed next meets on June 14-15. While the labor market continues to gain strength, inflation remains below the central bank's 2 percent target and mixed economic data could cloud the path to future rate hikes.

At 13:00 p.m. ET the Dow Jones industrial average was up 22.23 points, or 0.12 percent, at 18,012.55, the S&P 500 was down 2.13 points, or 0.1 percent, at 2,089.57 and the Nasdaq Composite was down 42.14 points, or 0.86 percent, at 4,846.14.

Six of the 10 major S&P sectors were higher, with the energy index's 1.11 percent rise leading the advancers.

Oil prices were higher, but still off 2016 highs, after the U.S. government reported U.S. crude stockpiles rose to a record high last week.

Twitter slumped 15.5 percent to $15 after revenue missed expectations. The stock lost about $1.9 billion in value since Tuesday's close.

Disappointing earnings have slowed down a recent rally but the S&P continues to hold near the record high it set almost a year ago. The index has rallied 15 percent since February.

First-quarter earnings from S&P 500 components are expected to have fallen 7.1 percent from a year earlier, according to Thomson Reuters I/B/E/S. Of the 166 companies that have reported, 59 percent reported revenue above analyst expectations, just short of the average 60 percent since 2002.

Ebay was up 3.3 percent at $25.31 after raising its full-year revenue forecast.

Boston Scientific was up 11.2 percent at $21.90, near a 10-year high, after the medical device maker's profit beat estimates. The stock provided the biggest boost to the S&P.

Advancing issues outnumbered decliners on the NYSE by 1,724 to 1,176. On the Nasdaq, 1,534 issues fell and 1,181 advanced.

The S&P 500 index showed 19 new 52-week highs and 2 new lows, while the Nasdaq recorded 54 new highs and 12 new lows.

(Reporting by Tanya Agrawal; Editing by Don Sebastian)