* Chinese stocks reverse sharp losses to end higher
* All 10 S&P sectors down; energy, materials worst hit
* Fed minutes expected at 2 p.m. ET
* S&P posts worst 2-day loss since late July
* Indexes down: Dow 1.11 pct, S&P 1.07 pct, Nasdaq 1.09 pct (Updates to early afternoon)
By Tanya Agrawal
Aug 19 (Reuters) - U.S. stocks fell more than 1 percent on Wednesday as investors worried about the effect of China's slowing growth ahead of the minutes from the latest U.S. Fed meeting that could give clues regarding the timing of a rate increase.
The S&P 500 posted its worst two-day loss since late July, while the Dow Jones industrial average and the Nasdaq composite posted their worst declines in about a week.
Energy and material stocks were whipsawed by wild swings in the Chinese market for the second day in a row.
Chinese stocks reversed sharp declines and ended higher after the central bank injected more funds into the financial system. The roller coaster ride in the market kept commodity prices under pressure, with oil and copper near six-year lows.
All the 10 major sectors were lower, with four of them down more than 1 percent. The energy index led the losses, slipping 2.7 percent in its worst day in about two weeks, as shares of oil majors Exxon and Chevron fell more than 2 percent.
The materials index was down 1.6 percent, weighed down by LyondellBasell and Dow Chemicals.
Investors are awaiting the minutes from last month's Fed meeting at 2 p.m. ET (1800 GMT).
Strong CPI data on Wednesday showed U.S. consumer prices rose slightly in July, marking the sixth straight month of increases and suggesting inflation pressures were stabilizing enough to support expectations of a rate hike this year.
September federal funds futures implied traders expect a 45 percent chance of the Fed raising rates in September, while likelihood of a December rate increase held steady at 73 percent according to CME Group's FedWatch program.
"We don't expect any major surprises from the minutes," said Jeff Carbone, co-founder and managing partner of Cornerstone Financial Partners.
"(Fed Chair Janet) Yellen has been telegraphing a rate hike this year and we are waiting to see if there is any change in that."
At 12:27 a.m. ET the Dow Jones industrial average was down 195.05 points, or 1.11 percent, at 17,316.29, with all 30 of its components in the red.
The S&P 500 was down 22.5 points, or 1.07 percent, at 2,074.42 and the Nasdaq composite was down 55.32 points, or 1.09 percent, at 5,004.03.
Target was little changed at $80.06 after the retailer reported a larger-than-expected rise in quarterly earnings.
American Eagle Outfitters fell 7.1 percent to $16.98 after the retailer forecast current quarter same-store sales growth that disappointed investors.
Yum Brands rose 1.4 percent to $85.39, a day after the owner of the KFC and Pizza Hut chains named new leaders for its China division as activist investors lobby the company to spin off that business.
Declining issues outnumbered advancing ones on the NYSE by 2,471 to 500. On the Nasdaq, 2,069 issues fell and 602 advanced.
The S&P 500 index showed four new 52-week highs and 27 new lows, while the Nasdaq recorded 13 new highs and 118 new lows. (Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D'Souza)