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Updates through late morning trade

By Lisa Pauline Mattackal and Purvi Agarwal

April 17 (Reuters) - U.S. stock indexes were mixed in choppy trading on Thursday as investors weighed progress in trade negotiations with Japan against concerns about the monetary policy outlook, while a slump in UnitedHealth's shares weighed on the Dow.

Investors found some optimism from U.S. President Donald Trump's comments on "big progress" in trade talks with Japan after steep losses on Wednesday, but an early recovery quickly fizzled out.

Meanwhile, UnitedHealth UNH.N plunged 23% and weighed on the blue-chip Dow .DJI after the insurer lowered its annual profit forecast on expectations of high medical costs for the rest of the year.

Other health insurers slumped, with CVS Health CVS.N down 2.5% and Humana HUM.N falling 6.7%.

Focus will be on tariff negotiation talks with dozens of countries over the coming weeks for more clarity on the size and scope of tariffs on individual nations and sectors.

"(The market) could change at any moment ... everyone's guessing right now as to what's going to transpire as far as tariffs are concerned," said Tom Bruce, macro investment strategist at Tanglewood Total Wealth Management.

At 11:45 a.m. ET, the Dow Jones Industrial Average .DJI fell 506.08 points, or 1.28%, to 39,163.31, the S&P 500 .SPX gained 12.25 points, or 0.23%, to 5,287.95, and the Nasdaq Composite .IXIC lost 39.30 points, or 0.23%, to 16,269.24.

Wall Street had extended losses on Wednesday after U.S. Federal Reserve Chair Jerome Powell warned Trump's trade policies risked pushing inflation higher while weakening economic growth, adding policymakers needed more clarity before adjusting policy.

Trump hit back on Thursday, saying in a post on his social media platform Truth Social that Powell's termination "cannot come fast enough" and calling for the U.S. central bank to cut interest rates.

"It's been known that Trump hasn't been happy with Powell ... the question is, does he attempt to do anything about it," Bruce said, adding that such a move would severely damage confidence in U.S. markets.

Traders have scaled back bets of a May rate cut to about 10%, according to CME's FedWatch, while a Reuters poll showed economists see a higher probability of a U.S. recession in the next 12 months.

On the day, however, data showed weekly jobless claims came in lower than expected, suggesting the labor market remains stable.

Ahead of the long weekend, all three major Wall Street indexes are on track for their third weekly decline in four, with the S&P 500 .SPX on pace to lose about 1.5% after its best week since November 2023.

Alphabet's GOOGL.O shares dropped 1.5% after a federal judge ruled Google illegally dominated two markets for online advertising technology.

Eli Lilly LLY.N rose 14% after the drugmaker said its experimental pill led to weight loss of nearly 8% and lowered blood sugar in type 2 diabetes patients.

A 3% gain in the energy index .SPNY also supported the S&P 500.

Netflix NFLX.O shares rose 1.3% ahead of results after the closing bell.

Advancing issues outnumbered decliners for a 3.1-to-1 ratio on the NYSE and a 1.44-to-1 ratio on the Nasdaq.

The S&P 500 posted two new 52-week highs and two new lows. The Nasdaq Composite recorded 19 new highs and 99 new lows.

(Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Shinjini Ganguli and Shounak Dasgupta)

((LisaPauline.Mattackal@thomsonreuters.com))