* May retail sales rise 0.5 pct vs est. 0.3 pct
* German bond yields fall below zero
* Apple gives biggest boost to all three indexes
* Indexes: Dow down 0.16 pct, S&P down 0.07 pct, Nasdaq up 0.13 pct (Updates to open)
By Yashaswini Swamynathan
June 14 (Reuters) - Wall Street was little changed on Tuesday as investors kept to the sidelines ahead of the Federal Reserve's policy meeting and a referendum on Britain's European Union membership.
The Federal Open Market Committee (FOMC) will commence its two-day meeting on Tuesday to decide whether the U.S. economy has recovered enough to be able to absorb an interest rate hike.
While traders have discounted a hike this month, they will parse Fed Chair Janet Yellen's speech at a conference on Wednesday for clues on the health of the economy and the trajectory of hikes.
Yellen, who had been dropping hints last month of a rate hike in the near term, toned down her comments after a dismal May employment report set off fresh concerns of the strength of the economy.
Traders have priced in a 17.9 percent chance of a rate hike next month and a 29 percent chance in September, according to CME Group's FedWatch tool.
Oil prices fell below $50 as investors remained nervous over the rising possibility of Britain exiting the European Union when it votes on June 23.
Recent opinion polls have indicated growing support for Brexit, prompting investors to scurry to safe-haven assets.
The yield on the 10-year German bond, Europe's benchmark bond, turned negative for the first time.
"It's ironic that we're having the Fed debating the next rise in interest rates when we are heading into an economy that is in a cyclical downturn. The Fed missed their window to begin to normalize policy three year ago," said James Abate, chief investment officer at Centre Asset Management in New York.
"It is a genuinely unique environment. No one knows how this movie ends." Abate said.
One bright spot was the 0.5 percent rise in U.S. retail sales in May, compared with a 0.3 percent rise analysts had expected.
At 9:36 a.m. ET (1336 GMT), the Dow Jones Industrial Average was down 27.63 points, or 0.16 percent, at 17,704.85.
The S&P 500 was down 1.42 points, or 0.07 percent, at 2,077.64.
The Nasdaq Composite was up 6.19 points, or 0.13 percent, at 4,854.63.
Apple rose 0.87 percent and gave the biggest boost to all three indexes.
Nine of the 10 major S&P sectors were lower, led by a 0.46 percent drop in the telecom services index.
Wall Street closed lower for the third straight session on Monday, dragged down by tech giants Microsoft and Apple .
Twitter rose 5.7 percent to $15.38 after Goldman Sachs added the micro-blogging site to its list of companies that could be bought in the next year.
Declining issues outnumbered advancing ones on the NYSE by 1,536 to 1,073. On the Nasdaq, 1,129 issues rose and 1,106 fell.
The S&P 500 index showed one new 52-week high and one new low, while the Nasdaq recorded one new high and 18 new lows. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Don Sebastian)