(Refiles to correct to "I" from "it" in paragraph 3)
* China investment, factory output miss expectations
* Investors cautious ahead of Fed's Thursday statement
* Indexes down: Dow 0.38 pct, S&P 0.41 pct, Nasdaq 0.34 pct
By Sinead Carew
Sept 14 (Reuters) - U.S. stocks closed down on Monday as many investors put off making big bets ahead of the Federal Reserve's policy meeting this week and others worried about weak economic data from China.
Stocks are expected to stay volatile ahead of a Federal Reserve announcement scheduled for Thursday after a two-day meeting at which it will decide whether or not to make its first interest rate increase since 2006.
"There's absolutely no conviction up or down. Everybody's waiting on the Fed. The Fed's sitting around singing that tune 'Should I stay or should I go now. If I stay it will be trouble. If I go it will be double'," said David Spika, global investment strategist for the GuideStone Funds, in Dallas, Texas citing lyrics from a popular song by The Clash.
The Fed has said it will raise rates when it sees a sustained economic recovery with emphasis on jobs and inflation but while the jobs market has improved inflation has been held down by weak oil prices.
A broad group of economists polled by Reuters last week bet on a September move by a slim margin; economists at banks that deal directly with the Fed, known as primary dealers, picked December as more likely; and traders of short term interest rate futures were giving a rate rise this week only a one-in-four chance.
Stocks have been volatile since China devalued its currency in August. The S&P 500 has had moves of at least 1 percent in more than 10 sessions since Aug. 20.
"Because of the volatility in the market and the conflicting data points on the U.S. economy, it's really difficult to get a firm handle on what the Fed's likely to do," Spika said.
Trading was slow with about 5.4 billion shares changing hands on U.S. exchanges, below the 8-billion daily average for the previous twenty sessions, according to Thomson Reuters data.
Also weighing on stocks was data showing China's investment and factory output in August missed forecasts, raising chances China's third-quarter economic growth may dip below 7 percent for the first time since the global crisis.
"China continues to be a concern as investors look for a bottom in regard to the country, even though the government has a lot of room to stimulate growth," said Chris Bertelsen, chief investment officer of Global Financial Private Capital in Sarasota, Florida.
The Dow Jones industrial average fell 62.13 points, or 0.38 percent, to 16,370.96, the S&P 500 lost 8.02 points, or 0.41 percent, to 1,953.03 and the Nasdaq Composite dropped 16.58 points, or 0.34 percent, to 4,805.76.
Nine of the 10 major S&P sectors fell, led by the materials index. Utilities rose 0.23 percent while the energy index fell 0.8 percent as U.S. crude oil prices settled down 1.4 percent.
Apple shares ended up 0.96 percent at $115.31 after it said iPhone pre-orders were on track to beat last year's first-weekend record.
NYSE decliners outnumbered advancers 2,044 to 971, for a 2.11-to-1 ratio; on the Nasdaq, 1,709 issues fell and 1,068 advanced for a 1.60-to-1 ratio.
The S&P 500 posted 2 new 52-week highs and 6 lows; the Nasdaq recorded 42 new highs and 72 lows. (Additional reporting by Tanya Agrawal; Editing by Nick Zieminski)