(Adds U.S. market open, byline, dateline; previous LONDON)
* Wall Street falters as Apple shine fades; Fed statement awaited
* Yen weakens on larger-than-expected Japanese stimulus
* Oil tumbles 2 pct after unexpected U.S. stock build
By Herbert Lash
NEW YORK, July 27 (Reuters) - The yen eased against the dollar on Wednesday after Japan unveiled a surprisingly large $265 billion stimulus package, while U.S. equity markets pared early gains as investors awaited the end of two-day meeting of Federal Reserve policymakers.
The earlier-than-expected announcement to boost the flagging Japanese economy lifted Asian stock markets but weighed on the safe-haven yen. The 28-trillion yen package exceeded initial estimates of about 20 trillion yen.
Wall Street opened higher, bolstered by strong results from Apple. But the benchmark S&P 500 index retreated and the Dow industrials traded just above break-even as technology shares rose.
European shares gained, led by auto stocks and luxury group LVMH after its second-quarter sales beat forecasts. The pan-European FTSEurofirst 300 rose 0.3 percent.
MSCI’s all country world stock index gained 0.07 percent.
“Folks are waiting for the Fed today for some sort of guidance, but it’s a head-scratcher that there’s nothing that can hold this market down,” said Jacob Rappaport, head of equity capital markets at INTL FCStone Financial Inc in Winter Park, Florida.
“There are not a lot of places to put money right now in a low-interest rate environment,” he said.
The Dow Jones industrial average rose 8.97 points, or 0.05 percent, to 18,482.72. The S&P 500 fell 3.01 points, or 0.14 percent, to 2,166.17 and the Nasdaq Composite is added 22.50 points, or 0.44 percent, to 5,132.55.
The prospect of more stimulus in Japan has overshadowed the Fed meeting, where the U.S. central bank was expected to leave interest rates unchanged.
Solid economic data has increased expectations that the Fed will raise rates in December, though some traders and analysts believe the Fed could hint on Wednesday that a September hike is possible.
The Fed’s policy-setting Federal Open Market Committee is scheduled to release its policy statement at 2 p.m. (1800 GMT).
The yen was last down 0.89 percent at 105.57 per dollar. The euro rose slightly to $1.0988.
A disappointing report on durable goods orders in June lifted U.S. Treasury prices.
A steeper-than-forecast 4 percent drop in demand for airplanes and other big-ticket items revived worries about U.S. manufacturing and reinforced the notion the FOMC would leave its target range on interest rates at 0.25 percent to 0.75 percent.
Oil prices tumbled more than 2 percent after the U.S. government reported a surprise build in crude and gasoline inventories during the peak summer driving season.
Brent was down $1.00 at $43.87 a barrel. WTI crude fell 81 cents to $42.11 a barrel.
Reporting by Herbert Lash; Editing by Nick Zieminski