Stocks were down for most of the session on concerns about what central bankers might say about the economy. However, the drop — the first for the Dow Jones industrials in six sessions — did make some prices look more attractive ahead of the Wednesday meeting.

Data released Tuesday showed the economy continues to sputter. The Commerce Department reported wholesalers' inventories grew at a slower rate in March, failing to meet projections. Meanwhile, the National Association of Realtors lowered its forecast for the housing market this year because of stricter lending standards and subprime woes.

Economic reports are expected to wield more influence on the direction of stocks as earnings announcements slow. The latest data did little to change expectations policymakers will leave rates unchanged, though Wall Street will really be looking for further direction about whether a hoped-for rate cut is in the offing.

"There's this wait-and-see pullback with regard to what the Fed might do on Wednesday," said Janna Sampson, a portfolio manager for Oakbrook Investments. "Given the run we've had, and a pretty strong start of the year, this might be a case of investors positioning their portfolios a little sooner than usual before the summer doldrums."

DOW ENDS DOWN AFTER STRING OF RECORD CLOSES

The Dow Jones industrial average fell 3.90, or 0.03 percent, to 13,309.07. The blue chip average had been up 24 of the last 27 sessions, and surpassed the 13,300 mark for the first time on Monday.

Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index was down 1.76, or 0.12 percent, at 1,507.72, and the Nasdaq composite index rose 0.80, or 0.03 percent, to 2,571.75.

Fixed-income investors placed optimistic bets ahead of the Fed meeting, sending bonds higher. The yield of the benchmark 10-year Treasury note fell to 4.63 percent from 4.64 percent late Monday.

Meanwhile, the dollar was mixed against most major currencies, while gold prices were weaker.

Oil prices advanced amid fears of supply disruptions following the bombing of three major oil pipelines by the militants in Nigeria. A barrel of light, sweet crude rose 79 cents to $62.26 on the New York Mercantile Exchange.

This lifted major oil companies. Exxon Mobil Corp. rose 68 cents to $81.38. Chevron Corp. picked up 47 cents to $80.05, while ConocoPhillips fell 9 cents to $70.25.

Though most analysts expect stocks will continue to advance, there are rising expectations on Wall Street that a correction will be needed to sustain the bull run. Before Tuesday's breather, the S&P 500 was moving toward its all-time high of 1,527.46, reached on March 24, 2000, at the height of the dot-com boom; the Dow's recent run has been its best showing since 1927.

"If we keep marching up without a break, we will set ourselves up for another sell off," said Alan Brown, head of investment for Schroder Investment Management. "But, the fundamentals still look pretty encouraging to me provided of course that the U.S. slowdown does not turn into something much worse."

CAUTIOUS AHEAD OF FED MEETING

Investors were cautious ahead of the Fed meeting for several reasons, including speculation that policymakers, in their economic assessment statement Wednesday, won't give any clear hints about whether it will change its stance on rate hikes. Between June 2004 and June 2006, the Fed lifted rates 17 consecutive times to cool an overheated economy, and have left them unchanged since.

The Commerce Department said wholesale inventories increased 0.3 percent to a seasonally adjusted $393.23 billion in March. The results fell short of estimates of a 0.4 percent gain.

The National Association of Realtors projected existing home sales will fall 2.9 percent this year to 6.29 million, compared with its previous forecast for a 2.2 percent decline. The industry is facing significant headwinds as speculative buyers begin to pull back, leading to a downshift in the entire market, the group said.

In corporate news, Hewlett Packard Co. lifted its second-quarter forecast on strong results in its personal computer and server business. The stock rose $1.21, or 2.8 percent, to $45.01.

Dow Jones & Co. fell 51 cents to $55 after the Securities and Exchange Commission accused two Hong Kong residents of unlawful trading when they bought $15 million worth of the publisher's stock ahead of an announcement that News Corp. had put in a bid. News Corp. fell 20 cents to $23.65.

Warner Music Group Corp. fell 16 cents to $17.14. The company posted a wider second-quarter loss due to restructuring costs, but surpassed Wall Street's profit projections after excluding items.

Trading continued on takeover activity. AK Steel Holdings Corp. soared $2.96, or 9.2 percent, to $35.02 after a report the company was being eyed by ArcelorMittal, the world's largest steel maker.

Declining issues outpaced advancers by a 3 to 2 basis on the New York Stock Exchange, where volume came to 1.50 billion shares, up from 1.32 billion shares on Monday.

The Russell 2000 index of smaller companies was down 0.97, or 0.12 percent, at 830.90.

Overseas, Japan's Nikkei stock average closed 0.07 percent lower. Britain's FTSE 100 gave up 0.81 percent, Germany's DAX index fell 1.11 percent, and France's CAC-40 declined 0.61 percent.

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