* Fed set for policy announcement at 2 p.m. ET
* Facebook gains after two days of steep losses
* Energy stocks jump as oil prices rise more than 2 pct
* General Mills drags on food stocks after forecast cut
* Indexes up: Dow 0.55 pct, S&P 0.46 pct, Nasdaq 0.38 pct (Updates to early afternoon)
By Sruthi Shankar
March 21 (Reuters) - U.S. stocks gained on Wednesday afternoon, ahead of an near-certain interest rate hike by the Federal Reserve, as Facebook Inc’s shares reversed course to trade higher and energy stocks got a boost from rising oil prices.
Facebook shares gained 3 percent and provided some relief to the technology sector. In two bruising days, the social media company lost some $50 billion in market value over reports of data misuse that raised broader questions about consumer privacy and the need for tougher regulation.
The technology index was up 0.36 percent.
The energy index jumped 2.76 percent as crude oil prices hit a six-week high after a surprise decline in U.S. inventories and as concern persisted over possible disruption to Middle East supply.
The Federal Reserve is expected to raise U.S. rates for the first time this year after a two-day policy meeting, but investors are on edge over the kind of monetary policy regime new Federal Reserve Chair Jerome Powell will pursue.
While markets are sure about the quarter-point hike, they are less confident of what the Fed signals next: three hikes this year, as previously forecast by policy makers, or four.
“We expect interest rates to inch higher, but not at an accelerated pace and that’s why you’ve got some strength here today,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.
“The rally we have right now, perhaps might be in response to expectations that we might be not surprised by the language.”
At 12:54 p.m. ET, the Dow Jones Industrial Average was up 0.55 percent at 24,864.3. The S&P 500 gained 0.46 percent to 2,729.57 and the Nasdaq Composite rose 0.38 percent to 7,392.37.
General Mills slumped about 10 percent after the company cut its full-year profit forecast due to higher freight and commodity costs.
That weighed on other food companies, with Kellogg and JM Smucker and ConAgra falling about 4 percent.
Southwest Airlines fell 4.6 percent after the carrier cut its forecast for a key revenue metric. Other airlines also fell, with the Dow Jones Airlines index was down 2.14 percent.
Investors are also nervous by signs of a brewing global trade war.
Reuters reported last week that President Donald Trump could target up to $60 billion in imports from China. The tariffs will likely be announced by Friday, a source in the administration told Reuters on Wednesday.
China, according to the Wall Street Journal, was planning counter-measures with tariffs aimed at U.S. agricultural exports from Farm Belt states.
As a result shares in soybean exporter Archer-Daniels fell 1 percent and Bunge dropped 0.7 percent.
“So far, we have seen low-level (trade) skirmishes, which are not material enough to affect the world economy,” said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.
“But if we see retaliation, and significant trade disruptions, it’s a different order or magnitude, could begin to affect global growth forecasts.”
Advancing issues outnumbered decliners on the NYSE for a 1.76-to-1 ratio, and for a 1.76-to-1 ratio on the Nasdaq. (Reporting by Sruthi Shankar in Bengaluru, Additional reporting by David Randall in New York; Editing by Dan Burns and Savio D’Souza)