* American Airlines shares up; oil prices fall
* Investors wait for Fed comment on rate hikes
* Indexes down: Dow 0.9 pct, S&P 0.6 pct, Nasdaq 0.2 pct (Updates to midday)
By Caroline Valetkevitch
March 17 (Reuters) - U.S. stocks fell on Tuesday following a rally in the previous session, hit by declines in commodity-related shares and nervousness ahead of a Federal Reserve meeting.
Materials were the weakest S&P sector with a 1.5 percent decline, led by Dupont, which was down 3.1 percent at $74.68. The energy sector was down 0.9 percent as oil prices fell further, pressured by concerns over a growing supply glut.
Investors were also anxious as the Federal Open Market Committee kicked off its meeting, which will be followed by a statement from Chair Janet Yellen Wednesday afternoon. Investors hope the statement will bring insight on the timing of an interest rate hike.
"People are waiting for the Fed to provide some degree of clarity going forward," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
Most economists expect the Fed to remove a pledge to be "patient" about raising interest rates from its statement, but O'Rourke said, "if they're still on pace for a mid-year move, whatever language they use doesn't make a difference."
At 12:32 p.m., the Dow Jones industrial average fell 158.98 points, or 0.88 percent, to 17,818.44, the S&P 500 lost 11.95 points, or 0.57 percent, to 2,069.24 and the Nasdaq Composite dropped 9.00 points, or 0.18 percent, to 4,920.51.
While higher rates are a sign of strength in the U.S. economy, some investors question whether the economy is strong enough to handle the increased borrowing costs.
Johnson & Johnson weighed most heavily on the S&P 500 with a 1.4 percent decline to $99.61.
The benchmark S&P 500 index on Monday had seen its biggest percentage gain since Feb. 3. Last week, the Dow and S&P registered their third week of losses.
Shares in American Airlines rose 6 percent to 53.22 after an announcement that it would join the S&P 500.
Declining issues outnumbered advancing ones on the NYSE by 1,968 to 1,005, for a 1.96-to-1 ratio; on the Nasdaq, 1,611 issues fell and 1,009 advanced, for a 1.60-to-1 ratio favoring decliners.
The S&P 500 was posting 15 new 52-week highs and 3 new lows; the Nasdaq Composite was recording 65 new highs and 53 new lows. (Editing by W Simon and Nick Zieminski)