* Fed minutes expected at 2:00 p.m. ET
* Economists still expect rate hike in Q3
* Southwest Airlines leads fall in airline stocks
* Yahoo bounces back from sharp selloff on Tuesday
* Indexes: Dow up 0.03 pct, S&P down 0.01 pct, Nasdaq down 0.01 pct (Adds details, changes comment, updates prices)
By Tanya Agrawal
May 20 (Reuters) - U.S. stocks were little changed in late morning trading on Wednesday, recovering from a fall in earlier in the session, as investors await the minutes from last month’s Federal Reserve meeting for clues on when interest rates will be increased.
U.S. 30-year Treasuries bond prices fell, prompted by worries that the Fed possibly had a stronger conviction to raise rates than previously thought.
The minutes of meeting are due at 2:00 p.m. ET (1800 GMT).
While the central bank is broadly expected to raise rates this year, the timing of the move has kept the market on tenterhooks. The Fed has said it will raise rates only when data suggests that the economy is strengthening.
Growth slowed to a crawl in the first quarter, while recent data has painted a mixed picture. Consumption, business spending and manufacturing data has suggested the economy is struggling, but housing starts were strong.
“The Fed is going to take a more macro view and will raise rates this year. They’re going to overlook the little bumps,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
“Markets will react negatively when they do raise rates because they love free money.”
The latest Reuters survey showed most economists were now less sure about when rates would be increased, but the median still suggested a move in the third quarter.
At 11:10 a.m. ET (1510 GMT) the Dow Jones industrial average was up 5.21 points, or 0.03 percent, at 18,317.6, the S&P 500 was down 0.13 points, or 0.01 percent, at 2,127.7 and the Nasdaq Composite was down 0.65 points, or 0.01 percent, at 5,069.39.
Half of the 10 major S&P 500 indexes were lower, led by a 0.5 percent fall in the industrials index.
Southwest Airlines led airline shares lower with a drop of 7 percent to $38.04 after it forecast a decline in passenger unit revenue for the quarter.
Citigroup and JP Morgan fell 0.8 percent and 0.6 percent respectively. They were among four banks fined a total of $6 billion for manipulating currency rates.
Yahoo Inc was up 3.7 percent at $42.50 after the company said a potential change in tax rules on spinoffs was not specific to its plan to spin off its stake in Alibaba. The stock fell 7.6 percent on Tuesday.
Lowe’s fell 4.3 percent to $68.74 after reporting lower-than-expected quarterly profit and sales.
Etsy slumped 22.9 percent to $16.24 after the operator of an online marketplace for handmade goods posted a bigger loss in its first report as a public company.
Pep Boys Manny Moe and Jack rose 15.3 percent to $10.67 on a report that the auto parts retailer had received takeover approaches.
Declining issues outnumbered advancers on the NYSE by 1,458 to 1,400, for a 1.04-to-1 ratio on the downside. On the Nasdaq, 1,391 issues fell and 1,174 advanced for a 1.18-to-1 ratio favoring decliners.
The S&P 500 showed 19 new 52-week highs and three new lows, while the Nasdaq recorded 57 new highs and 33 new lows. (Editing by Savio D‘Souza)