* HP drops after results, outlook
* Day two of Yellen testimony on deck
* New home sales data expected at 10 a.m.
* Indexes off: Dow 0.06 pct, S&P 0.08 pct, Nasdaq 0.16 pct (Updates to market open)
By Chuck Mikolajczak
NEW YORK, Feb 25 (Reuters) - U.S. stocks were little changed shortly after the open on Wednesday, with the Dow and S&P 500 holding near records, before a second day of testimony from Federal Reserve Chair Janet Yellen and data on the housing market.
The Fed chair told a congressional committee that the Fed is preparing to consider increases "on a meeting-by-meeting basis," a subtle change that helps to lay a foundation for the central bank's first rate hike since 2006, although the timing of the liftoff was still in question. Yellen's second day of testimony is set to begin at 10 a.m. (1500 GMT).
"There is a pregnant pause in the market this morning," said Peter Kenny, chief market strategist at Clearpool Group in New York.
"Markets are waiting to see if there is any further insight into the timeline in the normalization of rates, any shift in terminology that would indicate a more certain timeline or a significant shift in that timeline."
Also due at 10 a.m. (1500 GMT) is new home sales data for January, with expectations calling for sales to dip slightly to a seasonally adjusted annual rate of 470,000 units after an unexpectedly strong 481,000 in December.
The Dow Jones industrial average fell 11.56 points, or 0.06 percent, to 18,197.63, the S&P 500 lost 1.78 points, or 0.08 percent, to 2,113.7 and the Nasdaq Composite dropped 7.74 points, or 0.16 percent, to 4,960.38.
Along with lifting the Dow and S&P to their latest records, Yellen's comments helped push the Nasdaq to a 10th straight advance, the longest winning streak for the index since July 2009. After a sluggish start to the year, the Dow is up 6.1 percent in February, the S&P is up 6 percent and the Nasdaq has rallied 7.2 percent for the month.
Target reported a stronger-than-expected jump in same-store sales and profits for the key fourth quarter, and forecast modest earnings growth in the current quarter. Shares in the retailer rose 0.8 percent to $77.60.
Hewlett-Packard shares tumbled 8.5 percent to $35.21 as the worst performer on the S&P 500 after the world's No. 2 PC maker reported flat or lower quarterly revenue in all of its operating units and forecast full-year earnings well below analysts' expectations.
Lowe' Companies reported same-store sales well above analysts' estimates and forecast full-year sales above expectations, but shares of the home improvement retailer slipped 0.3 percent to $74.43.
As earnings season winds down, Thomson Reuters data through Wednesday morning showed that of the 465 companies in the S&P 500 that have posted earnings, 69 percent have topped expectations, matching the beat rate for the last four quarters but above the 63 percent rate since 1994.
Advancing issues outnumbered declining ones on the NYSE by 1,465 to 1,138, for a 1.29-to-1 ratio; on the Nasdaq, 1,027 issues rose and 980 fell, a 1.05-to-1 ratio favoring advancers.
The S&P 500 posted 21 new 52-week highs and no new lows; the Nasdaq Composite recorded 44 new highs and 8 new lows. (Reporting by Chuck Mikolajczak; Editing by Chizu Nomiyama and Nick Zieminski)