* Fed announcement expected at 2 p.m. ET (1800 GMT)
* Yellen speaks half an hour later
* U.S. fund futures see 25 pct chance of hike on Thursday
* Cablevision jumps after Altice deal
* Dow down 0.09 pct, S&P down 0.04 pct, Nasdaq up 0.09 pct (Adds details, adds comment, updates prices)
By Tanya Agrawal
Sept 17 (Reuters) - Wall Street was little changed in early trading on Thursday, with investors reluctant to trade aggressively ahead of the Federal Reserve's interest rate decision later in the day.
The Fed will announce the outcome of its policy meeting and release its latest economic projections at 2 p.m. ET (1800 GMT), followed by a news conference by Chair Janet Yellen at 2:30 p.m.
An increase in the Fed's benchmark rate, which has been near zero since the depths of the financial crisis in December 2008, would be the first since 2006.
The low rates have helped nurse the economy back to health since the crisis and underpinned a spectacular six-year bull run for stocks. However, there are concerns that continuing with ultra-low rates for too long could lead to asset bubbles such as the one in property prices that led to the last recession.
U.S. interest rates futures indicated a 25 percent chance the central bank will raise rates on Thursday, while 35 of 80 economists polled by Reuters expect a move.
"If the Fed doesn't raise interest rates, the conversation will immediately turn to the October meeting," said Alan Gayle, senior investment strategist at RidgeWorth Investments in Atlanta, which has about $42 billion in assets under management.
The next Fed meeting is on Oct. 27-28.
Whether or not the Fed raises rates on Thursday, investors will be hanging on every word during Yellen's news conference.
Uncertainty about when the Fed will switch gears has dogged Wall Street for months - a situation that has been complicated in recent weeks by market turbulence linked to slowing growth in China and worries about the health of the global economy.
However, many analysts say a rate hike now would at least remove a lot of the uncertainty that has troubled investors.
"The approaching Fed meeting is paralyzing activity and that probably will persist until (the announcement)," J.P. Morgan said in a note to clients ahead of start of trading.
At 10:29 a.m. ET the Dow Jones industrial average was down 15.17 points, or 0.09 percent, at 16,724.78, while the S&P 500 was down 0.86 points, or 0.04 percent, at 1,994.45 and the Nasdaq Composite was up 4.53 points, or 0.09 percent, at 4,893.77.
Six of the 10 major S&P sectors were higher, with the utilities index's 0.75 percent rise leading the gains.
The telecommunications index's 1.88 percent loss led the decliners. Verizon's 2.9 percent fall weighed the most on the Dow and the S&P. The company said it expected 2016 earnings to "plateau" amid stiff competition.
The CBOE volatility index, known as Wall Street's "fear gauge", was up 3.3 percent at 22.06, above its long-term average of 20.
Energy stocks pushed Wall Street higher on Wednesday after an almost 6-percent jump in oil prices, but trading was thin. Oil prices were lower on Thursday.
"As it stands now considering (Wednesday's) market rally, the bearish decision will be for the Fed not to hike," Mike O'Rourke, chief market strategist at Jones Trading, said in a note.
The Fed has said it will raise rates when it sees a sustained recovery in the economy.
Data on Thursday showed the number of Americans filing new applications for unemployment benefits fell last week to the lowest level in eight weeks.
Other data showed that housing starts fell more than expected in August, but a rebound in building permits pointed to sustained strength in the housing market, which should support economic growth.
Shares of Cablevision jumped 15.5 percent to $32.94 after European telecoms group Altice agreed to buy the company in a deal valued at $17.7 billion.
Oracle was down 2.5 percent at $37.33 a day after the company warned that revenue could fall in the current quarter.
Rite Aid was down 8.5 percent at $7.85 in heavy trading after the drugstore chain operator cut its full-year sales and earnings forecasts.
Advancing issues outnumbered decliners on the NYSE by 1,445 to 1,291. On the Nasdaq, 1,460 issues rose and 1,019 fell.
The S&P 500 index showed seven new 52-week highs and one new low, while the Nasdaq recorded 25 new highs and 19 new lows. (Reporting by Tanya Agrawal; Editing by Ted Kerr)