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While you were sleeping: Wall Street falls as Fed gathers

Wall Street fell as US Federal Reserve policy makers began a two-day meeting that will offer fresh clues about the timing of an increase in interest rates.

At the end of the Federal Open Market Committee meeting in Washington on Wednesday, investors will eye a statement as well as a press conference by Fed Chair Janet Yellen. The central bank will also release its latest economic forecasts.

In afternoon trading on Wall Street, the Dow Jones Industrial Average slid 0.71 percent, while the Standard & Poor's 500 Index fell 0.29 percent. The Nasdaq Composite Index rose 0.12 percent, bolstered by gains in Apple shares, which last traded 1.8 percent higher.

Declines in shares of DuPoint and those of Caterpillar, last down 2.8 percent and 2 percent respectively, led the Dow lower.

Economists polled by Reuters are almost evenly split on whether a rate increase will come in June or later in the year. In a Bloomberg survey completed March 12 that yielded 66 responses, 30 economists project the Fed will lift rates at their June 16-17 gathering, while another 21 said the Fed will hold until September.

"People are waiting for the Fed to provide some degree of clarity going forward," Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut, told Reuters.

A report showed US housing starts plunged 17 percent to 897,000 units at an annualised rate in February. The pace fell short of the most pessimistic forecast in a Bloomberg survey of 81 economists.

"Today's report leaves me a little concerned," Michelle Meyer, deputy head of US economics at Bank of America in New York, told Bloomberg. "While the initial reaction is to dismiss much of the drop because of the bad weather, the level of home construction continues to be depressed."

Apple shares rose, bucking the trend on Wall Street. A person with knowledge of the matter told Bloomberg that Apple plans to start accepting non-Apple devices as trade-ins, amid an effort to extend market-share gains against smartphones based on Google's Android software. And The Wall Street Journal reported Apple plans to launch a new subscription based TV channel service later this year.

In Europe, the Stoxx 600 Index ended the day with a 0.7 percent slide from the previous close. France's CAC 40 Index weakened 0.6 percent, while Germany's DAX dropped 1.5 percent. The UK's FTSE 100 Index added 0.5 percent.

A report showed German investor confidence grew less than expected in March. The ZEW Center for European Economic Research said its index of investor and analyst expectations advanced to 54.8 this month, up from 53 in February.

Oil fell amid ongoing concern about supply, pushing US crude oil as low as US$42.63 a barrel, the lowest level in six years. A settlement at US$42.82 or lower would be 20 percent below this year's peak, meeting the common definition of a bear market, according to Bloomberg.