* Fed seen announcing plans to unwind debt portfolio
* Sprint, T-Mobile shares jump after report of merger talks
* Nike falls as competition concerns trigger PT cuts
* Indexes up: Dow 0.07 pct, S&P 0.01 pct, Nasdaq 0.04 pct (Adds details, comment, updates prices)
By Sruthi Shankar
Sept 19 (Reuters) - U.S. stocks were little changed on Tuesday as investors held back from making major bets ahead of the Federal Reserve's policy meeting that is expected to roll out a plan to pare the central bank's debt holdings.
Investors do not expect the central bank to increase interest rates as an outcome of the two-day meeting but will closely watch Fed Chair Janet Yellen's views on inflation, which remains stuck below the Fed's 2-percent target rate.
"People are in wait-and-see mode. The expectations are that rates will remain unchanged and they (the Fed) will start balance sheet unwinding. But there's always a possibility of surprise, I think that is why investors are cautious," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.
"When you combine the excellent communication (from the Fed) and the small nature of the initial unwind, right now the market knows what's coming, I expect there to be no real response."
Any reduction in the Fed's balance sheet could make it harder for banks and investors to borrow certain Treasuries in the repurchase agreement market, making it more difficult and expensive to bet on or protect against rate increases.
At 11:00 a.m. ET (1500 GMT), the Dow Jones Industrial Average was up 16.16 points, or 0.07 percent, at 22,347.51, the S&P 500 was up 0.32 points, or 0.01 percent, at 2,504.19 and the Nasdaq Composite was up 2.42 points, or 0.04 percent, at 6,457.05.
Seven of the 11 major S&P sectors were higher, led by a 1.56 percent gain in the telecom services sector.
Shares of wireless carriers T-Mobile rose 4 percent and Sprint 6 percent following a report that the companies were in active merger talks.
Shares of Verizon and AT&T also rose about 2 percent, lifting the Dow and the S&P higher.
Health index was the biggest laggard on the S&P, pulled lower by United Health's 1.8 percent fall.
Best Buy fell more than 8.6 percent after the No.1 U.S. electronics retailer forecast 2021 adjusted earnings well below Wall Street estimates. The stock was the biggest loser on the consumer discretionary index
Tesla was down more than 2.4 percent after Jefferies started coverage of the electric car maker's stock with "underperform".
Bob Evans Farms rose 5.7 percent after packaged foods company Post Holdings said it would buy the frozen meals maker for about $1.5 billion.
Advancing issues outnumbered decliners on the NYSE by 1,385 to 1,288. On the Nasdaq, 1,365 issues rose and 1,320 fell. (Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)