* (Updates with housing starts data)
By Angela Moon
NEW YORK (Reuters) - Wall Street was set for ahigher open Tuesday after upbeat housing data and ahead ofthe Federal Reserve's monetary meeting later in the day.
The gains in futures signaled a further boost to the marketafter the S&P 500 broke above a technical range and closed at afour-month high on Monday.
"The Fed is likely to keep neutral and when they do, themarket will move up. But it would need a lot more volume thanwhat we saw yesterday to see a jump above another technicalrange," said Tom Schrader, managing director of U.S. equitytrading at Stifel Nicolaus Capital in Baltimore.
The Fed is expected to tread water, with a renewed promiseto keep its portfolio from shrinking but no new steps to easeits monetary policy. The central bank acknowledged in Augustthe U.S. recovery had lost momentum and Fed Chairman BenBernanke said it would renew efforts to stimulate growth if theoutlook soured appreciably. The Fed is expected to issue astatement at about 2:15 p.m. EDT
U.S. housing starts increased in August to their highestlevel in four months, while permits for future homeconstruction rose, suggesting the embattled housing market wasstarting to stabilize.
S&P 500 futures were up 2.3 points and above fairvalue, a formula that evaluates pricing by taking into accountinterest rates, dividends and time to expiration on thecontract. Dow Jones industrial average futures gained 21points, and Nasdaq 100 futures rose 5.75 points.
The S&P 500 closed at a four-month high but trading volumewas light Monday, with about 7.16 billion shares traded on theNew 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 ofAmerica Corp will lay off about 5 percent of itsinvestment banking staff and inform employees 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 of aninfluential shareholder advisory firm but got the backing ofanother in its fight with billionaire investor Ron Burkle overthe future of the nation's largest bookseller. (Reporting by Angela Moon; editing by Jeffrey Benkoe)