Wall St. set to open little changed ahead of Fed statement

(Reuters) - Wall Street was set to open little changed on Wednesday as investors were reluctant to add to positions ahead of a Federal Reserve statement that could provide hints on the timing of a rate hike.

Investors will scour the statement for any signs of when the Fed is likely to begin raising interest rates and the pace of any subsequent hikes.

The Fed statement is due at 2 p.m. ET, followed by Chair Janet Yellen's news conference half an hour later, with analysts expecting her to focus on signs the economy is recovering after a bumpy start to the year.

Many investors expect the Fed to signal that U.S. interest rates will be increased in September.

"Barring an unforeseen event, the Fed will not be keen to rock the boat," said Adam Sarhan, chief executive of Sarhan Capital in New York.

"I think Yellen has hedged her bets very carefully and remains data-dependent and I don't see a change in that strategy at the end of the meeting."

Applications for U.S. home mortgages fell last week as interest rates rose to their highest since October 2014, an industry group said on Wednesday. Mortgage application activity, which includes both refinancing and home purchase demand, fell 5.5 percent in the week ended June 12.

U.S. stocks closed higher on Tuesday following back-to-back daily declines, with merger activity offsetting market concerns as Greece struggles to avoid a default on its debt.

Relations between Greece and its creditors have become increasingly acrimonious in recent days, leaving little hope that a meeting of EU finance ministers on Thursday will make any progress.

Athens needs fresh funds to avoid defaulting on a 1.6 billion euro ($1.8 billion) debt repayment to the International Monetary Fund on June 30, which could drive it toward the euro zone exit.

Sarhan said a Greek exit will affect investors psychologically because the contagion could spread to Spain, Portugal and Italy who continue to face resistance against austerity measures.

S&P 500 e-minis were up 3.5 points, or 0.17 percent, with 124,479 contracts traded at 8:55 a.m. ET. Nasdaq 100 e-minis were up 5.25 points, or 0.12 percent, on volume of 10,178 contracts while Dow e-minis <1YMc1> were up 40 points, or 0.22 percent, with 3,813 contracts changing hands.

Kythera Biopharmaceuticals' shares rose 22.5 percent to $74.37 in premarket trading after the company said it will be bought by Allergan in a cash-and-stock deal valued at $2.1 billion. Allegran inched up 0.3 percent to $298.98.

FedEx fell 2.3 percent to $178 after the package delivery firm reported a quarterly net loss due to a $2.2 billion non-cash pretax charge related to a move to mark-to-market accounting for employee pensions.

Qihoo 360 Technology jumped 12.5 percent to $74.31 after the mobile antivirus software maker said a Chinese consortium had offered to buy the company for $77 per American depositary share.

Adobe Systems fell 1.2 percent to $79.02 after the Photoshop maker forecast lower-than-expected revenue and profit for the current quarter.

(Reporting by Tanya Agrawal; Editing by Don Sebastian)

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