By Sue Chang and Anora Mahmudova, MarketWatch

The Fed is expected to keep interest rates unchanged

U.S. stocks fell Tuesday, with the S&P 500 dropping for a sixth consecutive session to end at a nearly four-month low as investors grappled with a tightening presidential race, economic data, corporate earnings, and the Federal Reserve's monetary policy decision.

Polls show the race between Democratic nominee Hillary Clinton and Republican rival Donald Trump continues to tighten. The latest ABC News/Washington Post tracking poll showed Trump taking a one-point lead (http://www.marketwatch.com/story/trump-takes-one-point-lead-over-clinton-in-fresh-poll-more-on-trump-tax-avoidance-strategies-2016-11-01), while the RealClearPolitics polling average showed Clinton's lead narrowed to 2.2 percentage points (http://www.realclearpolitics.com/epolls/2016/president/us/general_election_trump_vs_clinton-5491.html) from more than 7 points two weeks ago.

Read:Stock market fear factor rises as Clinton-Trump race tightens (http://www.marketwatch.com/story/stock-market-fear-factor-rises-as-clinton-trump-race-tightens-2016-11-01)

(http://www.marketwatch.com/story/stock-market-fear-factor-rises-as-clinton-trump-race-tightens-2016-11-01)See also:Chart shows investors less prepared for Trump win than they were for Brexit (http://www.marketwatch.com/story/are-stock-market-investors-complacent-about-a-clinton-election-victory-2016-10-31)

Federal Reserve officials began a two-day policy meeting, which concludes on Wednesday, and are widely expected to leave rates unchanged on expectations the central bank will want to avoid influencing the outcome of the presidential election next week.

The S&P 500 index fell 14.43 points, or 0.7%, to close at 2,111.72, the lowest settlement since July.

The Dow Jones Industrial Average declined 105.32 points, or 0.6%, to finish at 18,037.10. The Nasdaq Composite fell 35.56 points, or 0.7%, to end at 5,153.58. The Dow's finish was the lowest since Sept. 14, while the Nasdaq's close was the lowest since since Sept. 9.

Read:These charts say bull market's 'best days' are still ahead (http://www.marketwatch.com/story/these-charts-say-bull-markets-best-days-are-still-ahead-2016-11-01)

"The market has been trading with a back and forth action as investors await the election. Being in the heart of earnings season complicates matters as does the concerns related to the Federal Reserve," said Bob Pavlik, chief market strategist at Boston Private Wealth, in emailed comments.

On the charts, the S&P 500 moved below its September low at 2,119 and its October low at 2,114. New leadership has failed to emerge and significant uncertainty hangs over the market concerning the election, the Federal Reserve's monetary policy path and the willingness of other major central banks to continue pursuing aggressive stimulus policies, said Adam Sarhan, chief executive at Sarhan Capital.

"I don't see new leadership emerging. From my standpoint, the market looks as if it's building a very large top after a 7-1/2 year bull market," he said.

An early rebound by oil futures provided support, but crude later turned south.

On the data front, two surveys on manufacturing (http://www.marketwatch.com/story/us-manufacturers-pick-up-the-pace-ism-finds-2016-11-01) in October showed the sector expanding slowly, consistent with a consensus view that growth is healthy enough for the Federal Reserve to increase interest rates at its December meeting.

The ISM number was decent, "but at this stage, investors are looking at the jobs number on Friday and election next week," said Eric Wiegand, senior portfolio manager at U.S. Bank's Private Client Reserve.

"The sideways move over the past month is the sign of lack of conviction among investors. With valuations this high, investors want to see earnings growth and not just improvement relative to lowered expectations," Wiegand said.

Economic news: Manufacturing activity was also a focus in the U.S.

The Institute for Supply Management manufacturing index rose to 51.9% in October, slightly surpassing the 51.7% forecast by economists polled by MarketWatch. Meanwhile construction spending declined 0.4% in September.

Investors were also digesting monthly car sales numbers. General Motors and Ford Motor Co (http://www.marketwatch.com/story/gm-october-sales-slip-due-to-fewer-selling-days-2016-11-01). reported their U.S. sales slipped in October, hurt by fewer selling days and a cutback in fleetsales.

Other markets: The ICE dollar index was down 0.7%.

Stocks closed mostly higher in Asia (http://www.marketwatch.com/story/asian-stocks-mostly-up-after-upbeat-manufacturing-data-from-china-2016-10-31), with Hong Kong's Hang Seng rising 0.9%. European stocks opened higher, but turned lower midmorning (http://www.marketwatch.com/story/earnings-gloom-swings-european-stocks-lower-2016-11-01)as disappointing earnings reports came in. Prices of metals, which are sensitive to growth news out of China, rose across the board.

The yen slipped after the Bank of Japan made no changes to policy (http://www.marketwatch.com/story/bank-of-japan-lowers-inflation-outlook-holds-off-on-more-stimulus-2016-10-31). The pound pared its gains that came after Bank of England Gov. Mark Carney late Monday said he'll remain in his post until June 2019 (http://www.marketwatch.com/story/bank-of-england-gov-mark-carney-to-leave-post-in-june-2019-2016-10-31).Movers and shakers:Gannett Co. shares (GCI) initially jumped Tuesday after the USA Today publisher said it has given up its effort to acquire the publisher of the Chicago Tribune and Los Angeles Times, which changed its name to Tronc Inc. (TRNC) from Tribune Publishing in June.

Gannet shares fell 2.3%, while Tronc shares skidded 12%.

U.S.-listed shares of Royal Dutch Shell PLC(RDSB.LN) (RDSB.LN) rose 4% after the oil giant reported a rise in third-quarter profit (http://www.marketwatch.com/story/shell-swings-to-profit-but-cautious-in-oil-view-2016-11-01).

Pfizer Inc.(PFE) dropped 2% after the drug giant reported third-quarter earnings and revenue slightly below forecasts.

L Brands Inc.(LB) shares sank 7.9% after downbeat third-quarter profit outlook.

Angie's List Inc.(ANGI) shares fell 1.7% after the company said it has hired financial advisers to review its strategic options as it continues to work on a turnaround and seeks new opportunities.

Archer Daniels Midland Co.(ADM) rallied 7.3% after the food processing company beat the earnings forecast for the third quarter.

--William Watts and Sara Sjolin contributed to this article.

(END) Dow Jones Newswires

November 01, 2016 16:53 ET (20:53 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.