Dow drops ahead of Fed statement; Apple lifts Nasdaq

NEW YORK (AFP) - US stocks Tuesday finished mostly lower ahead of a closely watched Federal Reserve policy announcement, while the Nasdaq rose on news of a potential new Apple television venture.

The Dow Jones Industrial Average dropped 128.34 points (0.71 per cent) to 17,849.08.

The broad-based S&P 500 shed 6.99 (0.34 per cent) at 2,074.20, while the tech-rich Nasdaq Composite Index advanced 7.93 (0.16 per cent) to 4,937.43.

Investors awaited the Fed's policy announcement Wednesday, which is expected to give clues on the timing of an increase in near-zero interest rates, perhaps as early as June.

Apple jumped 1.7 per cent following a Wall Street Journal report that it is in talks with CBS, ABC and other networks to offer a slate of television broadcasts across its devices.

"Apple seems to be on a roll right now," said a note from Barclays.

Shopping centre operator Macerich fell 3.5 per cent after rejecting a US$16 billion (S$22 billion) takeover proposal from mall giant Simon Property Group, saying the bid undervalues it but adding that it raises "serious" antitrust issues.

Simon fell 0.5 per cent.

American Airlines rose 6.9 per cent on news it will join the S&P 500 index, replacing pharma company Allergan, which was acquired by Actavis.

MGM Resorts International vaulted 10.6 per cent higher after Land and Buildings, a real estate investment company, called for the casino resorts company to consider restructuring holdings into a real estate investment trust.

Dow member DuPont, which faces a proxy battle with activist shareholder Nelson Peltz, dropped 3.1 per cent.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.06 per cent from 2.08 per cent Monday, while the 30-year declined to 2.61 per cent from 2.65 per cent.

Bond prices and yields move inversely.