U.S. stocks rally as Fed meeting begins

U.S. stocks ended slightly higher after wavering in a tight range Tuesday, as the Federal Reserve kicked off its two-day policy meeting.

The Dow Jones Industrial Average rose 9.79 points, or 0.05 percent, to 18,129.96. The S&P 500 edged up 0.64 point, or 0.03 percent, to 2,139.76. The Nasdaq Composite Index increased 6.33 points, or 0.12 percent, to 5,241.35.

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.

On the economic front, U.S. privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,142,000, 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.

Overseas, the Bank of Japan (BOJ) 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.

Japanese 225-issue Nikkei Stock Average dipped 0.16 percent to 16,492.15 points as the BOJ began its two-day meeting.

In Europe, German benchmark DAX index at Frankfurt Stock Exchange inched up 0.19 percent, while French benchmark index CAC 40 fell 0.13 percent. Endit