Blue chip stocks finished slightly higher for a fifth-straight session Tuesday, led by Caterpillar, Hewlett-Packard and Intel, after the Federal Reserve hinted it could take additional measures to stimulate economic growth.

The Dow Jones Industrial Average rose 7.41 points, or 0.07%, to 10761.00, closing at its highest level since May.

The blue chip index has risen in 13 of the last 15 sessions and is up 7.45% in September. Caterpillar powered the Dow's gains, rising $1.64, or 2.2%, to $76.39. Hewlett-Packard gained 53 cents, or 1.4%, to $39.92 and Intel rose 21 cents, or 1.1%, to 19.14. The Fed concluded its one day policy meeting without announcing additional steps to boost the recovery.

But central bank officials signaled they are uncomfortable with the recent low levels of inflation and said they're prepared to take additional action to boost the economic recovery.

The Nasdaq Composite snapped a nine day winning streak and fell 6.48 points, or 0.3%, to 2349.35. The index is up 11% in September. The Standard & Poor's 500-share index fell 2.93 points, or 0.3%, to 1139.78, its first drop in three days and biggest decline in two weeks.

But the broad index is still up 8.6% in September. Financials were the S&P 500's biggest declining sector Tuesday, falling 1.03%. Legg Mason fell 90 cents, or 2.9%, to $29.98 and Morgan Stanley declined 78 cents, or 2.9%, to $26.06.

European market

European stocks ended mixed Tuesday, with some markets surrendering gains late in the session, as jitters prevailed ahead of the U.S. Federal Reserve's policy announcement. Earlier, a successful Irish bond auction had buoyed sentiment.

The Stoxx Europe 600 index fell 0.5% to end at 265.01 after trading higher for most of the day. The U.K.'s FTSE 100 index slipped 0.5% to 5,576.19 and the French CAC 40 index fell 0.1% to 3,784.40.

The German DAX 30 index dropped 0.3% to 6,275.98. Still, other markets ended higher, boosted by Ireland's sale of EUR1.5 billion of sovereign bonds.

Borrowing costs rose amid nervousness about the cost of supporting the region's banking sector, but there was still enough demand to hit the top end of the range the government had been trying to sell. The main Irish ISEQ index gained 0.6%, as shares of Allied Irish Banks climbed 3.3%.

Asian market

Asian stock markets ended mostly higher Tuesday, though cautious trade limited gains ahead of the U.S. Federal Reserve's policy meeting later in the global day.

While Wall Street's solid rise Monday provided a positive early cue, Asian investors were more circumspect as they awaited the outcome of the Federal Open Market Committee meeting. Japan's Nikkei Stock Average fell 0.2% as trading resumed after Monday's public holiday.

China's Shanghai Composite rose 0.1% and Taiwan's Taiex added 0.1%. Hong Kong's Hang Seng Index added 0.1% to 22,002.59, finishing above the 22,000 point level for the first time since mid-April. Markets were also relatively quiet ahead of a string of regional holidays this week.

Financial markets in Seoul are closed through Thursday for public holiday, and mainland Chinese bourses are shut from Wednesday to Friday. Taiwan will be closed for a holiday Wednesday, followed by Japan and Hong Kong markets Thursday.

Japanese stocks gave up early gains to end in the red as exporters retreated on a stronger yen. Mazda fell 2.4% and Sony lost 1.5%.

Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets, said investors were also wary of China-related stocks because of rising tension between Japan and China.

On Sunday, China suspended high level contacts after Japan extended the detention of a Chinese boat captain accused of intentionally ramming his trawler into two Japanese patrol vessels.

Base metals

Base metals closed lower Tuesday as cautious investors awaited the outcome of a meeting of the Federal Reserve's rate setting committee.

Market participants reported lower volumes ahead of the Fed statement. Liquidity will be further reduced Wednesday, with China shut for a three day national holiday.

The metals did erase some losses in Europe's early afternoon as the U.S. Commerce Department announced housing starts had risen by more than expected, up 10.5% in August to a seasonally adjusted annual rate of 598,000.

Economists had expected starts to fall by 0.2%, to 545,000. Copper is particularly sensitive to property market news, as it is used widely in construction.

The data, however, were unable to buoy the metals for long and the markets saw further liquidation heading into the PM kerb close.

Crude futures settled lower Tuesday, pulled down by concerns about the sluggish economic recovery and its potential to hurt oil demand. Light, sweet crude for October delivery settled $1.34, or 1.8%, lower at $73.52 a barrel on the New York Mercantile Exchange.

The contract expired at settlement, and volume had already shifted to the November contract, which settled down $1.22, or 1.6%, to $74.97 a barrel.

Brent crude on the ICE futures exchange settled 90 cents lower at $78.42 a barrel. Oil prices extended losses after the Federal Reserve Tuesday hinted it's becoming uneasy about the outlook for the U.S. economy in 2011, with officials at the central bank expecting the recovery from the recession to be modest in the near term.

Gold futures set a new record high after the settlement on the view that the Federal Reserve would initiate another round of government asset purchases to stimulate the economy, boosting gold's value as an alternative asset.

The most actively traded gold contract, for December delivery, rose $6.90, or 0.5%, to $1,287.70 in electronic activity on the Comex division of the New York Mercantile Exchange. The contract also hit a record intraday high of $1,290.40 after the Federal Reserve's statement.