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NEW YORK (Reuters) - U.S. stock index futures wereflat Tuesday ahead of expectations of a Federal Reservedebate over whether to expand its monetary easing policy at ameeting later in the day.

* The Fed is expected to tread water, with a renewedpromise to keep its portfolio from shrinking but no new stepsto ease its monetary policy. The central bank acknowledged inAugust the U.S. recovery had lost momentum and Fed Chairman BenBernanke said the Fed would renew efforts to stimulate growthif the outlook soured appreciably.

* Economic data on tap includes August housing starts at8:30 a.m. EDT . Economists expect a modest gain to anannualized pace of 550,000 units from 546,000 units in theprevious month. The report will give investors a better idea ofwhether or not the housing market can stand on its own feetafter months of government support.

* S&P 500 futures were down 0.9 points and slightlybelow fair value, a formula that evaluates pricing by takinginto account interest rates, dividends and time to expirationon the contract. Dow Jones industrial average futuresdipped 6 points, and Nasdaq 100 futures fell 0.75points.

* Banking stocks will be in view after a source toldReuters that Bank of America Corp is laying off about 5percent of its investment banking staff and will informemployees this week.

* Global airlines are likely to post sharply higher 2010profits than previously forecast as the industry rebounds fromeconomic recession, the International Air Travel Associationsaid.

* Nokia , the world's top cellphone maker,decided for the second time to delay the launch of its N8smartphone, which is intended to challenge Apple Inc's iPhone.

* Real estate investment trust Home Properties Inc raised its outlook for third-quarter funds from operations.

* Barnes & Noble Inc failed to win the support ofan influential shareholder advisory firm but got the backing ofanother in its fight with billionaire investor Ron Burkle overthe future of the nation's largest bookseller.

* European shares rose 0.2 percent in morning trade,supported by mining stocks as investors awaited a FederalReserve statement. (Reporting by Angela Moon; editing by Jeffrey Benkoe)