NEW YORK (AP) – Stocks fluctuated in tepid trading Wednesday as investors awaited the Federal Reserve’s latest take on the economy, which could signal where interest rates are headed.

While Wall Street largely expects the Fed will leave short-term interest rates unchanged at 5.25 percent, investors are eager to learn whether the central bank will reveal a shift in its assessment of the economy. The Fed has remained vigilant about the threat of inflation, which it has said remains stubbornly high. However, a softening economy could quell the threat of inflation and, some investors are hoping, open the way for a rate cut.

The Fed left interest rates unchanged at its last five meetings after a string of 17 straight increases that began in 2004.

In midmorning trading, the Dow Jones industrial average fell 20.75, or 0.17 percent, to 12,267.35, after two sessions of gains.

Broader stock indicators showed modest gain. The Standard & Poor’s 500 index rose 0.31, or 0.02 percent, to 1,411.25, and the Nasdaq composite index advanced 0.05, or less than 0.01 percent, to 2,408.26.

Bonds fell ahead of the Fed decision. The yield on the benchmark 10-year Treasury note rose to 4.58 percent from 4.55 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.

While most of Wall Street’s attention will remain squarely on the Fed, a few key earnings reports should also draw interest. Morgan Stanley’s fiscal first-quarter earnings and revenue blew past Wall Street’s estimates and FedEx Corp.’s fiscal third quarter earnings came in stronger than expected but the shipping company warned profits in the coming fiscal year could fall below its expectations.

Morgan Stanley rose $2.47 ,or 3.2 percent, to $78.58, while FedEx fell $2.58, or 2.3 percent, to $109.71.

Software companies showed gains. An acquisitive Oracle Corp. indicated its expansion plans might be reaping dividends as its fiscal third-quarter earnings and new software sales topped Wall Street’s expectations. Oracle advanced 57 cents, or 3.3 percent, to $18.12.

Adobe Systems Inc. rose $1.63, or 4 percent, to $42.37 after the company reported its first-quarter results topped Wall Street’s expectations and the company increased its profit forecast.

Advancing issues outnumbered decliners by about 7 to 6 on the New York Stock Exchange, where volume came to 164.5 million shares.

The Russell 2000 index of smaller companies fell 0.86, or 0.11 percent, to 792.74.

Overseas, stocks markets in Japan were closed for a holiday. Hong Kong’s Hang Seng index rose 0.82 percent and the sometimes volatile Shanghai Composite Index rose 0.83 percent to a new record. A nearly 9 percent drop in the Shanghai index on Feb. 27 helped kick off a global selloff that shaved more than 3 percent from the major U.S. stock indexes and reintroduced volatility to an unusually calm U.S. market. The drop in Shanghai came after the ascendent index, which rose 130 percent last year, had set a string of record closes.

In afternoon trading, Britain’s FTSE 100 rose 0.64 percent, Germany’s DAX index rose 0.08 percent, and France’s CAC-40 slipped 0.04 percent.

___

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com