US STOCKS-Wall Street muted, awaits Fed policy statement

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* Modest drop in U.S. interest rates widely expected
* Fed set to release policy statement at 2 p.m. EDT
* Dow flat, S&P 500 up 0.03%, Nasdaq up 0.12%

(Updates to early afternoon)
By Shreyashi Sanyal and Karina Dsouza
July 31 (Reuters) - U.S. stocks treaded water on Wednesday,
as investors awaited an almost certain cut in interest rates by
the Federal Reserve and hints on whether it could open the door
to further easing in monetary policy.
With a quarter-percentage-point reduction in borrowing costs
widely expected, focus will be on Fed Chairman Jerome Powell's
comment on why the move was necessary and what comes next. The
Fed is set to release its policy statement at 2 p.m. EDT (1800
GMT). Investors are looking beyond the 25-basis-point cut and
questioning whether this might be an insurance cut or a shift in
monetary policy, said Art Hogan, chief market strategist at
National Securities in New York.
Wall Street's main indexes have had a strong run since a
steep selloff in May, with the S&P 500 index .SPX now up 20%
for the year on hopes that a modest rate cut would help combat
slowing growth and boost tame inflation.
"There are a lot of risks on the horizon and the Fed in
their shift in policy may now be willing to be more proactive
than reactive," said Justin Boller portfolio manager at Liquid
Strategies in Atlanta, Georgia.
Offering support to the main indexes was Apple Inc's
AAPL.O 3.78% gain after the iPhone maker beat quarterly profit
and revenue expectations, and forecast strong sales for the
current quarter, easing concerns around the impact of the
U.S.-China trade war. This helped the technology sector .SPLRCT rise 0.15%, but
a 8.43% slide in shares of Advanced Micro Devices Inc AMD.O
capped gains.
The semiconductor maker forecast third-quarter revenue below
expectations, hit by lower demand for its chips used in gaming
consoles, pushing the Philadelphia Semiconductor index .SOX
down 1.58%.
The United States and China wrapped up trade talks that both
sides described as "constructive," including discussions over
further Chinese purchases of American farm goods and an
agreement to reconvene in September. At 12:50 p.m. ET the Dow Jones Industrial Average .DJI was
up 0.83 points, or flat, at 27,198.85 and the S&P 500 .SPX was
up 0.76 points, or 0.03%, at 3,013.94.
The Nasdaq Composite .IXIC was up 9.96 points, or 0.12%,
at 8,283.58.
Electronic Arts Inc EA.O jumped 4.8%, after the video game
publisher posted a quarterly revenue beat, riding on the
continued success of its battle royale game "Apex Legends".

Beer maker Molson Coors Brewing Co TAP.N slid 6.9%, after
its quarterly net sales and profit missed estimates on weak
demand. The company also said its Chief Executive Officer Mark
Hunter was retiring. Corporate earnings have been robust so far. Nearly 300 of
all S&P 500 companies have reported second-quarter results and
74.7% have topped profit estimates, according to Refinitiv data.
The ADP National Employment Report showed private employers
added 156,000 jobs in July, above economists' expectations and
supporting the view of a firm domestic labor market. This comes
ahead of the Labor Department's more comprehensive monthly
non-farm payrolls data due Friday. Advancing issues outnumbered decliners by a 1.45-to-1 ratio
on the NYSE and by a 1.44-to-1 ratio on the Nasdaq.
The S&P index recorded 30 new 52-week highs and two new
lows, while the Nasdaq recorded 98 new highs and 50 new lows.