Moderate Wall Street as attention turns to the Fed by Reuters

By Medha Singh

(Reuters) – US stocks edged down on Tuesday as investors sidelined ahead of the Federal Reserve's two-day meeting, as week-end attacks on the country's largest oil refinery Saudi Arabia faded.

The stock markets were hit Monday by the attacks that destroyed nearly half of Saudi oil production, driving up oil prices while fueling geopolitical tensions.

But President Donald Trump's statement that he does not want the war and a report from the Reuters news agency saying that Saudi Arabia was about to restore 70% of oil production, which has calmed the nerves of the investors.

"It seems that the market largely ignores the possibility of a conflict at this stage," said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance in Charlotte, North Carolina.

The Energy Index () posted a drop in oil prices, after recording its best one – day push since January, Monday. So-called defensive consumer goods (), utilities () and real estate <.splrcr> recorded some of the largest gains among the top 11 sectors of S & P.

The Fed closes its policy meeting on Wednesday, during which the central bank is expected to lower interest rates by a quarter of a percentage point, the second rate cut of the year.

Investors will also await information on the scope of easing US monetary policy, as central bank policymakers are deeply divided over whether further rate cuts are warranted.

"It will be difficult for them to report an extremely dovish tone, since they are already half-divided at this point," Zaccarelli said.

banks <.spxbk>, which tend to underperform in a low interest rate environment, fell 0.95% and were the biggest drag on the S & P 500.

The latest economic reports are optimistic: US manufacturing output rose more than expected in August, while homebuilders' optimism rose unexpectedly in September.

At 1:06 pm ET, the Dow Jones Industrial Average () was down 52.70 points, or 0.19%, to 27,024.12, the S & P 500 () was down 2.10 points, or 0 , 07%, at 2,995.86. The Nasdaq Composite () was up 2.24 points, or 0.03%, to 8,155.78.

Of the stocks, Chipotle Mexican Grill Inc (N 🙂 increased by 2.8%, as it added for the first time in three years a new steak dish to its menu in the United States.

Home Depot Inc. (N 🙂 dropped 1.4% after Guggenheim demoted the home improvement chain's shares to "neutral" versus "buy".

Corning Inc (N 🙂 fell 7.4% as the glass maker Gorilla lowered its display volume forecast for the current quarter.

Kraft Heinz Co (O 🙂 slipped 4% after 3G Capital, the packaged food maker 's second largest investor, sold for less than 25 million shares in the open market.

Declining issues outnumbered defenders for a ratio of 1.05 to 1 on the NYSE and a ratio of 1.30 to 1 on the Nasdaq.

The S & P index posted 15 new highs over 52 weeks and a new low, while the Nasdaq recorded 45 new highs and 18 new lows.