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US STOCKS-Industrial stocks drive Wall St higher; Fed decision eyed

* Industrials lead gainers in afternoon trading

* U.S. consumer prices rise 0.4 pct in Nov, in line with estimates

* FOMC statement to be issued at 2:00 p.m. ET

* Indexes up: Dow 0.55 pct, S&P 0.17 pct, Nasdaq 0.32 pct (Updates to early afternoon)

Dec 13 (Reuters) - A surge in shares of Caterpillar and Boeing lifted the Dow industrials to record level in early afternoon trading on Wednesday, ahead of a widely-expected interest rate hike by the Federal Reserve.

Industrials are expected to benefit the most from the an overhaul of the tax bill, on which Republican leaders of both the Senate and the House reached a deal on Wednesday.

President Donald Trump said he would sign a tax bill with 21 percent rate for corporations but added that a final number for corporate tax rate had not been set.

"The market is trading at all-time highs, its run-up has been really in anticipation of tax reform," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

"Now you get tax reform done and there is clarity looking forward in terms of policy, and today's economic data creates more clarity on behalf of the Fed policy."

At 12:29 p.m. ET (1729 GMT), the Dow Jones Industrial Average was up 134.92 points, or 0.55 percent, at 24,639.72, the S&P 500 was up 4.64 points, or 0.17 percent, at 2,668.75 and the Nasdaq Composite was up 22.23 points, or 0.32 percent, at 6,884.55.

Caterpillar rose 3.3 percent and Boeing gained 1.6 percent, helping the S&P industrial sector up 0.75 percent.

The Fed is expected to increase interest rates by 25 basis points for the third time this year. Investors are eager to know how the Fed would balance a stimulus-fueled boost to the economy with benign inflation and tepid wage growth.

A Labor Department report showed underlying consumer inflation slowed in November, possibly impacting the pace at which the Fed hikes rates.

"We don't know the details of the tax plan but we know that there will be one. The Fed will feel very comfortable given the good growth, stable inflation. Tax code stimulus should provide the Fed additional confidence in 2018," said Stephen Wood, chief market strategist at Russell Investments in New York.

Investors also assessed Democrat Doug Jones' victory in a bitter fight for a U.S. Senate seat in deeply conservative Alabama on Tuesday. A Jones victory could mean trouble for Trump's policy agenda as it narrows the Republicans' already slim majority in the Senate.

Among other stocks, Western Digital gained about 2 percent and was the biggest tech gainer after the company agreed to settle a dispute with Toshiba.

Eli Lilly rose 1.53 percent after the drugmaker forecast 2018 profit and revenue ahead of Wall Street estimates.

Advancing issues outnumbered decliners on the NYSE by 1,704 to 1,152. On the Nasdaq, 1,927 issues rose and 921 fell. (Reporting by Rama Venkat Raman and Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)