The problem comes when one begins to tell stories of one's own. If, say, you read work you'd like to emulate, you run the risk of your own story becoming derivative or (possibly worse) of the mid-draft-my-work-will-never-be-that-good freakout. If you read things that are very, very different from your own work, you may find it hard to stay within the confines of your own style/genre (for better or worse).
Unfortunately for most of us, this is sort of a trial and error process. What reading will help you stay in the right headspace to write your story?
I've learned that reading YA while writing is a Really Bad Idea. My (very adult, rather dark) work becomes peppered with slang, and the vocabulary shrinks by about 150%. If I read similar (very adult, rather dark) work, insecurity sets in with a vengeance.
It was a really good day when I figured out that reading things with similar "mouth feel" - vocabulary, style, tone - to what I am aiming for is perfect, as long as they're in different genres. This means my nightstand is peppered with some rather diverse folks (Charles Stross has been keeping company with Margaret Atwood, and John Scalzi is hanging out with Toni Morrison), but I can write, and my writing is better for it.