US STOCKS-Wall St set to open up on housing data; Fed eyed

* Federal Reserve policy meeting in focus

* Housing starts rise to highest level in 4 months

* Futures up: S&P 2.3 pts, Dow up 21 pts, Nasdaq up 5.75

* For up-to-the-minute market news see [STXNEWS/US] (Updates with housing starts data)

By Angela Moon

NEW YORK, Sept 21 (Reuters) - Wall Street was set for a higher open on Tuesday after upbeat housing data and ahead of the Federal Reserve's monetary meeting later in the day.

The gains in futures signaled a further boost to the market after the S&P 500 broke above a technical range and closed at a four-month high on Monday.

"The Fed is likely to keep neutral and when they do, the market will move up. But it would need a lot more volume than what we saw yesterday to see a jump above another technical range," said Tom Schrader, managing director of U.S. equity trading at Stifel Nicolaus Capital in Baltimore.

The Fed is expected to tread water, with a renewed promise to keep its portfolio from shrinking but no new steps to ease its monetary policy. The central bank acknowledged in August the U.S. recovery had lost momentum and Fed Chairman Ben Bernanke said it would renew efforts to stimulate growth if the outlook soured appreciably. The Fed is expected to issue a statement at about 2:15 p.m. EDT (1815 GMT) For details, see [ID:nSGE68J04M]

U.S. housing starts increased in August to their highest level in four months, while permits for future home construction rose, suggesting the embattled housing market was starting to stabilize. For story, see [ID:nN20141294] and for table, see [ID:nCLALKE64O]

S&P 500 futures SPc1 were up 2.3 points and above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures DJc1 gained 21 points, and Nasdaq 100 futures NDc1 rose 5.75 points.

The S&P 500 closed at a four-month high but trading volume was light Monday, with about 7.16 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq -- below last year's estimated daily average of 9.65 billion.

Banking stocks will be in view after reports that Bank of America Corp (BAC.N) will lay off about 5 percent of its investment banking staff and inform employees this week. For details, see [ID:nN20105532]

Global airlines are likely to post sharply higher 2010 profits than previously forecast as the industry rebounds from economic recession, the International Air Travel Association said. [ID:nSGE68J0NT]

Nokia (NOK1V.HE)(NOK.N), the world's top cellphone maker, decided for the second time to delay the launch of its N8 smartphone, which is intended to challenge Apple Inc's (AAPL.O) iPhone. [ID:nN20107098]

Real estate investment trust Home Properties Inc (HME.N) raised its outlook for third-quarter funds from operations. [ID:nSGE68J0MU]

Barnes & Noble Inc (BKS.N) failed to win the support of an influential shareholder advisory firm but got the backing of another in its fight with billionaire investor Ron Burkle over the future of the nation's largest bookseller. [ID:nN20251570] (Reporting by Angela Moon; editing by Jeffrey Benkoe)