*

Indexes: Dow up 0.05%, S&P 500 down 0.07%, Nasdaq down

0.14%

(Updates with early afternoon prices)

By Pranav Kashyap and Nikhil Sharma

July 16 (Reuters) -

U.S. stock indexes pared losses on Wednesday after President

Donald Trump said it was "highly unlikely" that he would fire

Federal Reserve Chair Jerome Powell, minutes after several

reports said he was likely to do so.

The main U.S. stock indexes fell sharply earlier, the

dollar plunged and Treasury yields rose after Bloomberg News

reported

the possibility of replacing Powell, citing an unidentified

White House official.

Separately, Reuters News

reported

, citing a source, that Trump is open to the idea of firing

Powell.

Trump was quick to deny the reports, even as he

unleashed a new barrage of criticism against the Fed chair for

not cutting interest rates.

"Any rhetoric between and Jerome Powell and Donald Trump

is noise to me. We aren't making any portfolio considerations or

changes," said David Wagner, head of equities at Aptus Capital

Advisors LLC.

"The market understands that the new Fed chair tends to

be announced a year ahead of time which should be upcoming in

the next few months. There is no reason for Trump to negate the

arm's-length distance between the Federal Reserve and the

executive branch in the wake of a new Fed Chair being named in

the next month or two."

The benchmark S&P 500 fell as much as nearly 1%

following the reports, but clawed back from those losses

following Trump's comments.

At 12:03 p.m. ET, the Dow Jones Industrial Average

rose 24.56 points, or 0.05%, to 44,047.85, the S&P 500

lost 4.16 points, or 0.07%, to 6,239.25 and the Nasdaq

Composite lost 29.77 points, or 0.14%, to 20,648.03.

The CBOE Volatility Index, Wall Street's "fear

gauge," hit an over a three-week high earlier but eased from

those levels.

Trump has repeatedly criticized Federal Reserve monetary

policy in recent months, angry over the central bank's refusal

to cut interest rates. Fed officials have resisted cutting rates

until there is clarity on whether Trump's tariffs on U.S.

trading partners reignite inflation.

A recent Supreme Court ruling suggests no change to the

long-held understanding that the law prohibits a president from

firing a Fed chair over a policy difference.