By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market edged up on Tuesday after Russian President Vladimir Putin said he did not seek to partition Ukraine, while signing a treaty to annex Crimea.

Investors turned all their attention to the Federal Reserve's two-day policy-setting meeting which is set to begin on Tuesday, while reaction to a pair of economic reports that were in line with expectations was muted.

The S&P 500 (SPX) added 4 points, or 0.2%, to 1,852.88.

The Dow Jones Industrial Average (DJI) rose 33.44 points, or 0.2%, to 16,281.27, with Microsoft Corp leading the gains.

The Nasdaq Composite (RIXF) gained 13 points, or 0.3%, to 4,293.19.

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Markets took Putin's remarks justifying annexing Crimea and saying that he did not seek to partition Ukraine, in stride.

A pair of economic reports that were in line with expectations added little to the sentiment.

Construction on new U.S. homes fell slightly in February, but in a sign that work will pick up as the weather warms, builders filed more permits to start new projects -- mainly on multi-dwelling units like condos and apartments. The previous months' number was revised higher. Also: Spotlight on the economy: Is housing construction about to warm up?

Ian Shepherdson, chief economist at Pantheon Macroeconomics wrote housing starts numbers 'could have been worse, but single-family permits numbers are worrying'.

"The not-so-good news is that all the increase in permits in February was in the volatile multi-family component, while single-family fell for the third straight month to their lowest level since Jan 13. The trend here is clearly downwards, and SF starts are even weaker," he wrote in a note.

Consumer prices in the U.S. rose slightly in February because of higher food and housing costs, but overall inflation remained quiet, according to the latest government figures.

The Fed will release a policy statement and updated economic forecasts on Wednesday afternoon. Chairwoman Yellen is due to hold a news conference after the meeting, the first to be led by her. Analysts expect the Fed will roll out a new low-rate pledge and further tapering of its monthly bond-buying program.

Among individual stocks, GameStop Corp. (GME) shares dropped 4.6% after Wal-Mart Stores Inc. (WMT) said it would allow customers to hand in used videogames in exchange for gift cards, which can be used in its retail stores or online. The change in policy from Wal-Mart Stores could eat away at GameStop's dominance of the $2 billion used videogame market in the U.S.

Shares of FutureFuel Corp.(FF) rose 19% as the biofuels company late Monday reported a more-than-fourfold jump in profit. Hertz, Adobe, Oracle are stocks to watch Tuesday.

Coach Inc (COH) shares rose slightly after Barclays initiated coverage of the stock with 'equalweight' rating, according to Dow Jones.

Shares of Hertz Global Holdings, Inc. (HTZ) slipped 0.8% after the auto-rental group posted fourth-quarter adjusted earnings. It also said it received board approval to proceed with a spinoff of its equipment-rental business that is expected to close by early next year.

Oracle Corp. (ORCL) is scheduled to report fiscal third-quarter results after the bell, with analysts looking for earnings of 70 cents a share on sales of $9.36 billion. Shares were up 1.2% premarket.

In other markets, gold (GCJ4) fell on Tuesday in volatile trading as investors looked ahead to the Fed meeting. Gold lost ground Monday as investors put money back into stocks. The dollar fell sharply against the Japanese yen (USDJPY), also reversing some of the previous day's moves. Oil prices (CLJ4) were marginally higher.

European stocks gained ground. Earlier, the German ZEW survey of investor sentiment for March came in weaker than expected. The Nikkei 225 index largely tracked Wall Street gains from Monday, with that index gaining close to 1%. The Shanghai Composite Index was flat.

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