By Ankur Banerjee and Tanya Agrawal
(Reuters) - U.S. stocks were little changed in late morning trading on Thursday as a fall in healthcare and consumer discretionary stocks capped gains, while investors turned their attention to second-quarter earnings.
Amazon.com shares <AMZN.O> fell 0.7 percent and was among the top three drags on the S&P and the Nasdaq, while a 0.8 percent drop in McDonald's <MCD.N> weighed on the Dow.
The healthcare index <.SPXHC> also took a hit with Johnson and Johnson <JNJ.N> and Celgene <CELG.O> weighing on the index.
Investors continued to keep an eye on Federal Reserve Chair Janet Yellen's second day of testimony before Congress, a day after she signaled a dovish stance on interest rates.
The U.S. economy is healthy enough for the Fed to raise rates gradually and begin winding down its massive bond portfolio, though low inflation and a low neutral rate may leave the central bank with diminished leeway, Yellen said.
"Yesterday's move was in response to Yellen comments that should inflation remain below the 2 percent target rate, the central bank will be less aggressive in their tightening program," said Sam Stovall, chief investment strategist at CFRA Research.
"Today, the market is saying that's old news and let's focus on the matter at hand, which is earnings that will be coming out in earnest this week."
Quarterly earnings kick off on Friday with big U.S. banks including JPMorgan Chase <JPM.N>, Wells Fargo <WFC.N> and Citigroup <C.N> reporting results.
Second quarter earnings are expected to increase 7.9 percent from a year ago, after first-quarter earnings posted their best performance since 2011, according to Thomson Reuters I/B/E/S.
At 11:01 a.m. ET (1501 GMT), the Dow Jones Industrial Average <.DJI> was up 5.46 points, or 0.03 percent, at 21,537.6, the S&P 500 <.SPX> was up 1.09 points, or 0.04 percent, at 2,444.34.
The Nasdaq Composite <.IXIC> was up 1.58 points, or 0.03 percent, at 6,262.75.
Data showed U.S. producer prices unexpectedly rose in June. In the 12 months through June the producer level inflation, or PPI, increased 2.0 percent, above the 1.9 percent rise expected.
Another set of data showed weekly jobless claims fell last week for the first time in a month.
Among stocks, Target <TGT.N> rose 3.4 percent after the retailer gave an upbeat second-quarter forecast. The news boosted other retailers, with Wal-Mart <WMT.N> and Costco <COST.O> rising about 1.3 percent.
Yandex <YNDX.O> jumped 15.3 percent after the company and Uber agreed to combine their Russian ride-sharing businesses.
Declining issues outnumbered advancers on the NYSE by 1,492 to 1,264. On the Nasdaq, 1,722 issues fell and 919 advanced.
(Reporting by Ankur Banerjee and Tanya Agrawal in Bengaluru; Editing by Arun Koyyur)