* Yellen to speak on monetary policy on Friday
* Materials lower as gold weakens
* Indexes down: Dow 0.14 pct, S&P 0.16 pct, Nasdaq 0.13 pct (Updates to mid-afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Aug 24 (Reuters) - Wall Street retreated on Wednesday, pulled lower by declines in the materials and healthcare sectors as investors continued to assess the possibility of an interest rate hike in the coming months.
The market is awaiting Federal Reserve Chair Janet Yellen's speech in Jackson Hole, Wyoming, on Friday for insight on the direction of monetary policy.
Recent hawkish comments from some Fed officials, including Vice Chairman Stanley Fischer, have raised expectations that Yellen might signal a hike in September.
"The market over the past several weeks has been in a holding pattern, really not doing much of anything and the reason for that is everyone is waiting to hear what Yellen is going to say," said Peter Cardillo, chief market economist at First Standard Financial in New York.
"Of course the markets might get surprised. The markets are looking for clarity and we might not get clarity."
The benchmark S&P 500 has not seen a move of more than 1 percent in either direction on a closing basis since July 8.
Expectations for a rate hike in September have crept up to 24 percent from 21 percent on Tuesday, according to CME Group's FedWatch. The odds of a hike in December are slightly more than 50 percent.
Materials, down 0.8 percent, was among the worst performing sectors, as names such as Newmont Mining and Freeport-McMoRan lost more than 6 percent. Gold fell to a one-month low on a firmer dollar.
Healthcare shares, off 1 percent, were weighed down by a drop in Mylan as political pressure mounted on the company in the wake of price increases for its EpiPen allergy treatment. Mylan shares were off 4.3 percent to $43.66.
While Wall Street is trading near record levels, volumes have been below average in the past few sessions as the U.S. earnings season winds down and traders avoid major bets until a clearer picture on monetary policy emerges.
The Dow Jones industrial average fell 52.77 points, or 0.28 percent, to 18,494.53, the S&P 500 lost 8.65 points, or 0.4 percent, to 2,178.25 and the Nasdaq Composite dropped 31.30 points, or 0.6 percent, to 5,228.78.
Express Inc plunged 24.5 percent after the apparel maker slashed its full-year earnings outlook.
Declining issues outnumbered advancing ones on the NYSE by a 2.19-to-1 ratio; on Nasdaq, a 1.82-to-1 ratio favored decliners.
The S&P 500 posted 16 new 52-week highs and no new lows; the Nasdaq Composite recorded 87 new highs and 18 new lows. (Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)