“This morning weakness in Boeing and Apple reports are being offset a bit because traders are looking forward to a dovish or neutral Fed,” said Adam Sarhan, CEO of Sarhan Capital.
Energy gained more than 1.5 percent to help the S&P 500 turn higher.
U.S. crude oil futures jumped more than 2.5 percent to top $32 a barrel in late-morning trade after the Energy Information Administration reported a build of 8.4 million barrels, more than the prior week’s 4.0 million rise but less than an earlier industry report indicated. Brent surged 3.5 percent to trade around $32.90 a barrel as of 11:58 a.m. ET.
Boeing pared losses to trade less than 7 percent lower. The stock initially fell more than 9.5 percent after the firm gave full-yearguidance below expectations, although the jetmaker reported earnings that beat on both the top and bottom line.
Shares of Apple held nearly 5 percent lower after the iPhone maker reported fewer-than-expected unit sales of its flagship product, for the lowest growth in shipments since the iPhone was launched in 2007. Apple also forecast its first revenue drop in 13 years, citing some softness in the critical Chinese market, Reuters reported.
“It’s weighing on stocks more broadly given its size and dominance,” said Jack Ablin, chief investment officer at BMO Private Bank.
The Nasdaq composite underperformed, holding slightly lower after briefly falling more than 1 percent in morning trade as Apple declined and the iShares Nasdaq Biotechnology ETF (IBB) struggled for gains after briefly spiking 1 percent in opening trade.
Read MoreWhy the Fed could jolt markets
The Federal Open Market Committee is scheduled to release its meeting statement at 2 p.m. ET as it concludes its two-day meeting.
“If the (statement is) somewhat dovish I think the market will actually move higher,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab, citing the gains in stocks after ECB President Mario Draghi’s comments last week raised hopes of further stimulus in the euro zone.
“I find it a little disappointing that the market wants the Fed to ease up,” he said.
Analysts don’t expect the central bank to move on rates, but will scrutinize the statement for signs of how much the Fed is watching recent global market activity and indications on the future path of tightening.
“I think it’s going to be volatile after 2 p.m.. I think people are going to try to read a lot into the Fed statement,” said Omar Aguilar, chief investment officer of equities at Charles Schwab Investment Management.
“The wording in the statement (and) when Janet Yellen goes in front of Congress will probably give an indication on the Fed’s view on the state of the economy,” he said.
Fed Chair Janet Yellen is scheduled to hold her semi-annual testimony before Congress in about two weeks.
In economic news, new home sales jumped to a seasonally adjusted annual rate of 544,000 from an upwardly revised November figure of 491,000.
The U.S. dollar index traded about 0.4 percent lower, with the euro edging towards $1.09 and the yen at 118.46 yen against the greenback.
United Technologies, maker of Pratt & Whitney aircraft engines and Otis elevators, reaffirmed guidance but reported a 4.5 percent decline in fourth-quarter revenue as a strong dollar weighed.
The S&P 500 fell 5 points, or 0.27 percent, to 1,898, with information technology leading four sectors lower and consumer staples leading gainers.
The Nasdaq composite fell 41 points, or 0.90 percent, to 4,526.
Decliners were a step ahead of advancers on the New York Stock Exchange, with an exchange volume of 306 million and a composite volume of nearly 1.4 billion in late-morning trade.
Crude oil futures for March delivery rose 31 cents to $31.75 a barrel on the New York Mercantile Exchange. Gold futures for February delivery fell $3.90 to $1,116.30 an ounce as of 11:22 a.m. ET.
—Reuters contributed to this report.
On tap this week:
Earnings: eBay, Facebook, Paypal, Qualcomm, Citrix, Discover Fincl., Juniper Networks, Lam Research, SanDisk, Texas Instruments
1 p.m.: Five-year note auction
2 p.m.: FOMC statement
Earnings: Abbott Labs, Alibaba, Altria, Bristol-Myers Squibb, Caterpillar, Deutsche Bank (prelim), Eli Lilly, Ford, AutoNation, Baker Hughes, Harley-Davidson, Hershey, Time Warner Cable, Under Armour, Amazon.com, Amgen, Microsoft, Visa, Electronic Arts, KLA-Tencor, Western Digital
8:30 a.m. Initial claims
8:30 a.m. Durable goods
10 a.m. Pending home sales; housing vacancies
10:30 a.m.: Natural gas inventories
11 a.m.: Kansas City Fed manufacturing index
1 p.m. Seven-year note auction
Earnings: AbbVie, Chevron, Colgate-Palmolive, Honda Motor, Honeywell, MasterCard
8:30 a.m. Real GDP Q4; international trade; employment cost index
9:45 a.m. Chicago PMI
10 a.m. Consumer sentiment
3:30 p.m. San Francisco Fed President John Williams on panel
*Planner subject to change.