Wall Street higher as investors look for clues on rate hike

European shares hit a near four-month low as markets braced for the possibility of a Greece default

U.S. stocks were higher on Tuesday, after two straight days of losses, as investors looked for clues regarding the timing of a rate hike after a two-day Federal Reserve meeting.

The central bank is unlikely to raise rates in this meeting but investors will watch for any hints from Fed Chair Janet Yellen at a press conference after the meeting on Wednesday about the timing of a possible rate increase.

The Fed has said it remains data-dependent and will raise rates only when it sees an improvement in the economy. Second-quarter data points to a recovery after a halt in growth earlier in the year.

U.S. housing starts fell in May after a hefty increase the previous month, but a surge in permits for future construction to a near eight-year high suggested the pullback was temporary and pointed to underlying strength in housing.

"Investors are not expecting a whole lot from the Fed meeting," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. Brown expects a rate hike in September.

"The market is still anxious about Greece and would like the situation to be dealt with one way or another. The week-after-week uncertainty isn't good for the market."

World markets were down with European shares hitting a near four-month low as financial markets braced for the possibility of Greece defaulting on its debt.

Greek Finance Minister Yanis Varoufakis told a German newspaper that he is not planning to present new reform proposals at a Eurogroup meeting on Thursday, despite warnings from the rest of Europe that time is running out.

There is an even chance of Greece defaulting on its debt payments, according to economists polled by Reuters, although the probability of it leaving the euro zone is still only one-in-three.

At 9:54 a.m. ET (1354 GMT) the Dow Jones industrial average was up 48.95 points, or 0.28%, at 17,840.12, the S&P 500 was up 3.14 points, or 0.15%, at 2,087.57 and the Nasdaq Composite was up 1.74 points, or 0.03%, at 5,031.71.

Nine of the 10 major S&P 500 sectors were higher, with the consumer staples index leading the advancers with a 0.53% increase.

UnitedHealth Group's 1.9% rise boosted the Dow and the S&P.

Coty's shares jumped 15.9% to $30.20, after the perfume maker won auctions to acquire hair-care, fragrance and cosmetics businesses from P&G for as much as $12 bln, according to sources. P&G was up 1.2% at $79.10.

Avalanche Biotechnologies slumped 45.8% to $21.08, a day after the eye drug developer's experimental therapy showed that vision improvement was not significant. The result prompted brokerages to cut their ratings on the stock.

Advancing issues outnumbered decliners on the NYSE by 1,460 to 1,211. On the Nasdaq, 1,186 issues fell and 1,152 rose.

Two stocks on the S&P 500 index hit a 52-week high while one hit 52-week low. The Nasdaq recorded 56 new highs and 15 new lows.