New York, Dec 19 (IANS): US stocks closed higher as investors awaited the central bank's latest decision on interest rate hikes.

The Dow Jones Industrial Average was up 82.66 points, or 0.35 percent, to 23,675.64 on Tuesday. The S&P 500 rose 0.22 point, or 0.01 percent, to 2,546.16. The Nasdaq Composite Index was up 30.18 points, or 0.45 percent, to 6,783.91, Xinhua news agency reported.

The Federal Reserve is widely expected to hike its benchmark overnight lending rate for the fourth time this year when it concludes a two-day policy meeting on Wednesday.

While the equities market may have priced in the final hike of the year, investors will be looking for clues to the Fed's next move on monetary policies and its plan on interest rate hikes next year.

Markets have been rattled throughout the year amid fears of rapid interest rate hikes. Such concerns grew more credible over the past month as growth expectations retreated.

Market expectations for a Fed rate hike in December stood at 74.9 percent, according to the CME Group's FedWatch tool.

Rising interest rates can be a hurdle to smaller companies that carry a high proportion of debt, so any sign that the Fed plans to continue to raise rates each quarter could weigh on corporate sentiment.

In the meantime, investors continue to digest soft economic data.

Construction of single-family homes fell to a one and a half year low, pointing to deepening housing market weakness that could spill over to the broader economy.

Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,256,000, a decline of 3.6 percent year on year, according to the Commerce Department on Tuesday.

New York manufacturers reported on Monday that business activity is growing at a slower pace in recent months. The Empire State Manufacturing Survey's headline general business conditions index, aggregated by the Federal Reserve Bank of New York, fell 12.4 points to 10.9 in December, weaker than analysts' expectations of around 20.6.

Homebuilder sentiment dropped in December to the lowest point in more than three years as potential buyers delayed purchasing new homes, giving rise to concerns over affordability. The key measure of the sentiment retreated four points in December to 56, according to the National Association of Home Builders/Wells Fargo Housing Market Index.