EMERGING MARKETS-Latam stocks drop as Brazil drags ahead of Fed

* Investors await statement from U.S. Federal Reserve

* Santiago retail sales seen jumping this year

* Brazil's Bovespa dips 1.01 pct, Mexico's IPC up 0.2 pct
(Updates to afternoon)

By Sean Mattson and Silvio Cascione

MEXICO CITY/SAO PAULO, Jan 26 (Reuters) - Latin American
equities seesawed on Wednesday as markets awaited a policy
statement from the U.S. central bank, as a drop in Brazilian
equities weighed.

The MSCI Latin American stocks index .MILA00000PUS slid
0.32 percent, reversing early gains for what could be a second
straight session of losses.

The Federal Reserve was expected to mention an improving
outlook for the U.S. economy, the world's largest and a major
regional trading partner, in a statement due around 1915 GMT.
For details, see [ID:nN25283937]

"They are not expected to raise (interest) rates, but there
should be a comment about the improvement of growth in the
United States and at the global level," said Carlos Ponce, head
of stock analysis at brokerage IXE.

Surprisingly strong data on U.S. home sales were offset by
disappointment that U.S. earnings did not solidly beat
expectations, he added.

Without positive news, stocks could have trouble pushing
higher in the short term, traders noted.

"The key word at the moment is uncertainty," said Luiz
Nunes, director of Claritas Wealth Management in Sao Paulo.

Mexico's IPC index .MXX edged up 0.2 percent, though
remaining within its range of the past week.

Shares of mining company Grupo Mexico (GMEXICOB.MX) rose
1.26 percent, after its steepest slide in the previous session
since mid-November.

But Cemex (CMXCPO.MX), the world's No. 3 cement maker,
dropped 1.73 percent.

Shares in Banorte (GFNORTEO.MX) traded nearly flat after
Mexico's No. 3 bank and the largest locally owned financial
group reported a 17 percent rise in fourth-quarter profits.
[ID:nN25291762]

Brazil's benchmark Bovespa stock index .BVSP fell 1.01
percent, touching its lowest point since late December.

"The market here is uncoupled (from abroad)," said Luiz
Roberto Monteiro, a senior stock trader with Corretora Souza
Barros in Sao Paulo. "Foreigners are now selling."

Worries in Brazil about the possibility of higher interest
rates to contain a rise in consumer prices could also weigh,
Nunes said. Policymakers last week hiked their key borrowing
rate to 11.25 percent from 10.75 percent, and analysts say more
hikes are on the way.

Tighter borrowing costs could result in less liquidity to
flow into equities.

Voting shares of JBS (JBSS3.SA), the world's biggest meat
company, fell 2.15 percent.

The company might only be able to bid between $19 to $20 a
share for Sara Lee Corp SLE.N as it struggles to raise more
financing for the deal, the Wall Street Journal reported on
Wednesday. [ID:nN26158358]

An analyst who declined to be quoted by name said on
Wednesday that a Sara Lee acquisition could derail JBS's
efforts to integrate recent purchases. The company has acquired
about a dozen rivals since 2007. [ID:nN26268749]

Mining giant Vale (VALE5.SA), the world's largest producer
of iron ore, gave up 0.61 percent, reversing gains of the
previous session.

Chile's IPSA index .IPSA advanced 0.51 percent, snapping
back from a third close in recent weeks near the 4,830 level.

Retailers rose, with Falabella FAL.SN adding 0.79 percent
and Cencosud CEN.SN 0.44 percent.

Chile's Chamber of Commerce on Wednesday forecast retail
sales in the capital Santiago will rise around 10 percent in
2011, after increasing by 17.6 percent last year.
[ID:nN26138550]
(Additional reporting by Michael O'Boyle in Mexico City and
Luciana Lopez in Sao Paulo)