* Energy shares rally after sharp selloff; Apple also rebounds
* Financials weigh as China news clouds U.S. rate hike timing
* Alibaba falls to record low as revenue growth slows
* Indexes: Dow down 0.3 pct, S&P down 0.1 pct, Nasdaq up 0.1 pct (Updates to late afternoon)
By Caroline Valetkevitch
Aug 12 (Reuters) - U.S. stocks were near flat late Wednesday afternoon, paring steep losses as Apple and energy shares rebounded amid a second day of worries about a slowdown in China.
Energy shares, which have been hit hard by the China concerns along with other commodities in recent weeks, bounced back with oil prices. The S&P energy index was up 2 percent, the biggest positive for the S&P 500.
Apple, for whom China is key growth market, also reversed course after falling 3.4 percent earlier in the session. It was last up 0.9 percent at $114.61.
The yuan hit a four-year low on Wednesday, falling for a second day after Chinese authorities devalued it. The move has exacerbating worries about the outlook for China's economy and its impact on the rest of the world.
The S&P 500 briefly dipped into negative territory for the year earlier in the day, while the Dow fell further into the red for 2015.
Financial shares were among the biggest negatives, with the S&P financial index down 1.1 percent.
The devaluation has made the outlook for U.S. interest rates more uncertain, said Bruce Zaro, chief technical strategist, Bolton Global Asset Management in Boston.
"The trump card remains the Fed and how the markets are going to react to that," he said.
At 2:50 p.m. the Dow Jones industrial average fell 45.4 points, or 0.26 percent, to 17,357.44, the S&P 500 lost 2.32 points, or 0.11 percent, to 2,081.75 and the Nasdaq Composite added 3.43 points, or 0.07 percent, to 5,040.22.
Earlier, the Dow fell to a six-month low, while the Nasdaq and the S&P hit a one-month low in a broad decline.
The CBOE Volatility index, a measure of the premium traders are willing to pay for protection against a drop in the S&P 500, jumped as much as 18.7 percent to 16.28, its highest level in a month. It was last up 2.6 percent at 14.06.
The yuan devaluation has huge implications for demand in the rest of the world and commodity prices, but it is too early to judge what is happening with the Chinese currency policy, New York Federal Reserve President William Dudley said.
"The PBOC action marginally lowers the odds of Fed liftoff in September, in our view, and December liftoff remains our call," Goldman Sachs said in a note.
A decline in U.S. overnight indexed swap rates indicated the probability of a rate hike next month faded to less than 40 percent, from an above 50 percent probability after last week's solid U.S. jobs data.
In corporate news, Alibaba was down 5.5 percent at $73.11 after hitting an all-time low of $71.03. The retailer's revenue growth slowed.
Macy's fell 4.2 percent to $64.70 after it also reported weak quarterly sales.
Declining issues outnumbered advancing ones on the NYSE by 1,711 to 1,340, for a 1.28-to-1 ratio on the downside; on the Nasdaq, 1,569 issues fell and 1,196 advanced for a 1.31-to-1 ratio favoring decliners.
The benchmark S&P 500 index was posting 9 new 52-week highs and 19 new lows; the Nasdaq Composite was recording 25 new highs and 115 new lows. (Additional reporting by Tanya Agrawal in Bengaluru; Editing by Savio D'Souza and Meredith Mazzilli)