* Fed to release July meeting minutes at 2:00 p.m. ET
* Target, Lowe's fall after profit forecast cuts
* Cisco among top drags on all three indexes
* Indexes down: Dow 0.12 pct, S&P 0.11 pct, Nasdaq 0.15 pct (Updates to early afternoon)
By Yashaswini Swamynathan
Aug 17 (Reuters) - U.S. stocks were lower on Wednesday as investors held off from making big bets ahead of the release of the minutes of the Federal Reserve's July policy meeting.
The Fed left interest rates unchanged at its meeting last month but said near-term risks to the economy had diminished, leaving the door open for a possible rate hike this year.
Investors will parse the minutes, due at 2:00 p.m. ET (1800 GMT), for hints on when the Fed would next raise rates, particularly in light of New York Fed President William Dudley's hawkish comments on Tuesday.
Dudley, a permanent voting member and a close ally of Fed Chair Janet Yellen, said a rate hike as soon as September was possible given evidence of wage gains and a tighter labor market.
"Investors seem guarded today," said Eric Wiegand, senior portfolio manager at the Private Client Reserve at U.S. Bank.
"There is not a lot of enthusiasm in either direction as investors continue to wait for greater clarity on the direction of growth and on central bank policies."
Traders see an 18 percent chance of a hike in September, up from 9 percent before Dudley's Tuesday comments, while the bets jumped to 45.5 percent from 37.4 percent for December, according to the CME Group's FedWatch tool.
St. Louis Federal Reserve president James Bullard, also a voting member, stood by his view that a single rate hike is all that was needed for the "foreseeable future."
Poor results from big retailers Target and Lowe's also hurt investor sentiment.
Shares of both the companies were down about 6.5 percent after they cut full-year earnings forecasts.
The stocks were chiefly responsible for the 0.62 percent decline in the S&P 500's consumer discretionary index.
At 13:06 p.m. ET (1706 GMT), the Dow Jones industrial average was down 22.29 points, or 0.12 percent, at 18,529.73, the S&P 500 was down 2.5 points, or 0.11 percent, at 2,175.65 and the Nasdaq Composite index was down 7.86 points, or 0.15 percent, at 5,219.25.
Nine of the 10 major S&P 500 indexes were lower, with the interest rate-sensitive sectors - telecom service providers falling the most. Financials, which stand to gain in the event of rate hike, declined the least.
The CBOE volatility index, or Wall Street's "fear gauge," rose by the most in over three weeks, suggesting weak investor appetite for riskier assets.
Wall Street has been trading at record highs in the past few weeks, supported by better-than-expected corporate earnings and expectations of the Fed keeping rates low.
Cisco fell 2.04 percent to $30.49 after technology news site CRN reported the company is laying off about 14,000 employees or 20 percent of its global workforce.
Declining issues outnumbered advancing ones on the NYSE by 1,680 to 1,217. On the Nasdaq, 1,604 issues fell and 1,109 advanced.
The S&P 500 index showed seven new 52-week highs and no new lows, while the Nasdaq recorded 43 new highs and 19 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty)