U.S. stocks rebound as Fed meeting begins

U.S. stocks traded higher in the morning session Tuesday as the Federal Reserve kicked off its two-day policy meeting.

By midday, the Dow Jones Industrial Average rose 47.28 points, or 0.26 percent, to 18,167.45. The S&P 500 added 4.38 points, or 0.20 percent, to 2,143.50. The Nasdaq Composite Index was up 10.30 points, or 0.20 percent, to 5,245.33.

The Fed will make a policy announcement Wednesday afternoon after the conclusion of the meeting.

The central bank, however, is expected to leave rates unchanged this week and not lift again until December.

Financial markets have been choppy since last week on contrasting remarks on rate hikes by Fed officials.

Overseas, the Bank of Japan will also meet Tuesday and make an announcement Wednesday. There are speculations that the Japanese central bank could cut interest rates further into negative territory.

On the economic front, U.S. privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,142,000, missing market consensus, the Commerce Department announced Tuesday.

This is 5.8 percent below the revised July estimate of 1,212,000, but is 0.9 percent above the August 2015 rate of 1,132,000.

"The slowdown in starts and permits in the South, the region that accounts for nearly 48 percent of total starts, weighed heavily on the national data in August. Outside the South, the other three regions saw gains in both starts and permits, suggesting the pullback is likely to be temporary," said Sophia Kearney-Lederman, an economic analyst at FTN Financial.

On Monday, U.S. stocks reversed early gains to end slightly lower as Wall Street awaited the U.S. central bank's policy meeting. Endit