* American Airlines shares up; oil prices fall
* Investors wait for Fed comment on rate hikes
* Indexes: Dow down 0.8 pct, S&P down 0.4 pct, Nasdaq up 0.04 pct (Updates to afternoon)
By Caroline Valetkevitch
March 17 (Reuters) - The Dow and S&P 500 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.
The Nasdaq was up slightly, boosted by shares of Apple , up 1.7 percent at $127.03, and Facebook, up 1.7 percent at $79.36.
Among S&P 500 sectors, materials were the weakest with a 1.2 percent decline, led by Dupont, 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 anxious as the Federal Open Market Committee kicked off its meeting, to be followed by a statement from Chair Janet Yellen Wednesday afternoon. Investors hope the statement brings insight into 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 2:37 p.m., the Dow Jones industrial average fell 146.26 points, or 0.81 percent, to 17,831.16, the S&P 500 lost 9.11 points, or 0.44 percent, to 2,072.08 and the Nasdaq Composite added 1.94 points, or 0.04 percent, to 4,931.45.
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 1.3 percent decline to $99.76.
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.
Also boosting the Nasdaq, shares in American Airlines rose 7.6 percent to 54.02 after an announcement that it would join the S&P 500.
Declining issues outnumbered advancing ones on the NYSE by 1,828 to 1,191, for a 1.53-to-1 ratio; on the Nasdaq, 1,516 issues fell and 1,166 advanced for a 1.30-to-1 ratio favoring decliners.
The S&P 500 was posting 17 new 52-week highs and 3 new lows; the Nasdaq Composite was recording 77 new highs and 59 new lows. (Editing by W Simon and Nick Zieminski)