* House and Senate approve sweeping tax bill
* U.S. Treasury yields hit nine-month highs
* Philip Morris down on Reuters report of trial irregularities
* FedEx up on results, leads Dow Transports to record
* Dow up 0.05 pct, S&P up 0.02 pct, Nasdaq off 0.03 pct (Updates to early afternoon)
By Sruthi Shankar
Dec 20 (Reuters) - Wall Street’s main indexes were flat on Wednesday, taking a breather after a month-long rally and as U.S. Treasury yields rose as a bill to cut $1.5 trillion in taxes progressed toward the finish line.
The Republican-controlled U.S. House of Representatives gave final approval to a sweeping tax bill which will be the largest overhaul of the U.S. tax code in 30 years. The Senate has already voted in favor of the bill.
The proposed changes include cutting the corporate tax rate to 21 percent from 35 percent from Jan. 1, which could boost company earnings and pave the way for higher dividends and stock buybacks.
The S&P 500 has climbed about 4.7 percent since mid-November when the House passed the bill, led by a rally in sectors such as transport, banks and others that are expected to benefit the most from lower taxes.
Some market analysts say the market has already priced in the approval of the tax bill.
“We rallied a lot on sort of a non-event and there is a little bit of head scratching about what’s really new that we should be rallying on,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.
“There is no news to take us higher in terms of stocks, part of it could be rotation out of bonds and maybe some nibbling at stocks that perhaps people think will perform well in 2018.”
At 12:27 p.m. ET (1727 GMT), the Dow Jones Industrial Average was up 13.27 points, or 0.05 percent, at 24,768.02 and the S&P 500 was up 0.64 points, or 0.02 percent, at 2,682.11.
The Nasdaq Composite was down 1.84 points, or 0.03 percent, at 6,962.01.
Treasury yields hit nine-month highs on optimism the tax overhaul will boost economic growth and as home construction data supported the view of strong fourth-quarter growth.
Seven of the 11 major S&P sectors were higher, led by a 1.2 percent rise in telecoms, considered by some analysts to be the biggest beneficiary of lower taxes. AT&T gained 1.9 percent and Verizon 0.5 percent.
Energy stocks also rose 0.8 percent as oil prices rose half a percent, supported by a larger-than-expected drop in U.S. inventories.
The Dow Jones Transport Index jumped about 1 percent crossing 10,600 points for the first time ever, helped by a surge in FedEx.
FedEx jumped nearly 4 percent to a record after its strong results and forecast, saying the tax overhaul would benefit earnings further.
Technology stocks, expected to benefit the least from lower taxes, were down 0.17 percent on the S&P 500. Chipmaker Micron was up 4.5 percent after its strong results and forecast.
Consumer staples index fell 0.64 percent, weighed down by a 2.1 percent slide in Philip Morris.
Reuters reported former Philip Morris employees detailed irregularities in the clinical trials for the company’s e-cigarette, due to be voted on by the U.S. FDA next year.
Advancing issues outnumbered decliners on the NYSE by 1,618 to 1,200. On the Nasdaq, 1,563 issues rose and 1,277 fell. (Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty and Savio D’Souza)