By Ryan Vlastelica
NEW YORK (Reuters) - Stock markets around the world were little changed on Tuesday as investors refrained from placing big bets ahead of a Federal Reserve meeting that could adjust expectations about how soon the U.S. central bank will hike interest rates.
Speculation that the Federal Reserve could raise interest rates sooner and faster than previously predicted has supported the U.S. dollar and pressured equities of late, though U.S. indexes remain near record levels.
Wall Street stocks rose modestly on the day, while an index of European shares fell 0.4 percent as this week's referendum on independence in Scotland kept investors on edge with polls suggesting the vote remains too close to call.
The MSCI world equity index, which tracks shares in 45 countries, was unchanged on the day, recovering off a one-month low earlier.
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"Generally, there's been some turbulence every time the Fed has moved from accommodation to tightening," said Jim Paulsen, chief investment strategist at Wells Fargo Asset Management, which has $490 billion under management. "To think that in the mother of all monetary easing cycles, which is what we're going through, we're going to turn the monetary boat without any turbulence is unrealistic. But this will bring a lot of buying opportunities for the long term."
The Dow Jones industrial average rose 1.89 points, or 0.01 percent, to 17,033.03, the S&P 500 gained 3.32 points, or 0.17 percent, to 1,987.45 and the Nasdaq Composite added 4.79 points, or 0.11 percent, to 4,523.69.
The benchmark 10-year Treasury note rose 3/32 in price to yield 2.5815 percent.
Asian shares slipped, with MSCI's broadest index of Asia-Pacific shares outside Japan shedding 0.7 percent to its lowest since late June, while Japan's Nikkei snapped a five-session winning streak to close down 0.2 percent.
The Fed will begin its two-day policy meeting later on Tuesday, and investors will be scanning the outcome for clues on the timing of the first rate hike in more than eight years. The Fed will also release economic and interest rate projections, extending their forecast horizon through 2017.
It has said it does not expect to raise rates until 2015, but recent strong data has led Fed officials to acknowledge they may need to act sooner than they thought just a few months ago.
In the currency market, the dollar index, which hit a 14-month peak on Sept. 9 and is on its longest weekly winning streak since 1997, was little changed at 84.21.
The euro held steady at $1.2937, hemmed in a $1.2859-$1.2980 range after a sell-off sparked by the European Central Bank's interest rate cut early this month faded.
Brent crude rose 1.1 percent to $98.98 per barrel, while U.S. crude futures gained 1 percent at $93.80 per barrel, rising on the prospect of a likely supply cut from OPEC.
(Editing by Meredith Mazzilli)
