* Housing starts fall to lowest levels in a year
* American Airlines shares up; oil prices fall
* Futures down: Dow 41 pts, S&P 4.5 pts, Nasdaq 1 pt (Adds market moves, commentary)
By Sinead Carew
March 17 (Reuters) - U.S. stock index futures implied a lower open on Tuesday after a rally in the previous session and ahead of a Federal Reserve meeting that could give investors a gauge on the timing of an interest rate hike.
The Federal Open Market Committee is due to start a two-day meeting on Tuesday and is expected to put out its statement and projections on Wednesday afternoon.
Most economists expect the Fed to remove a pledge to be "patient" about raising interest rates from its statement, giving it flexibility on when to kick off its first rate hike since 2006.
The benchmark S&P 500 index on Monday saw its biggest percentage gain since Feb. 3. Last week, the Dow and S&P registered their third week of losses.
Some investors were giving back gains in the absence of any big news while others were holding tight ahead of the Fed statement, said Art Hogan, chief market strategist at Wunderlich Securities in New York.
"We're very much in a wait-and-see mode until 2.30 p.m. tomorrow," said Hogan.
U.S. housing starts plunged to their lowest level in a year in February likely as harsh weather kept builders at home, a temporary setback for the housing market's recovery.
S&P 500 e-mini futures were down 6 points and fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract, indicated a lower open. Dow Jones industrial average e-mini futures fell 56 points and Nasdaq 100 e-mini futures lost 1.75 points.
Retailer DSW Inc's shares were up 5.8 percent at $39 in early trade after a better-than-expected outlook, while another retailer Burlington Stores' shares were up 1.4 percent to $58.20 after its quarterly report.
Shares in American Airlines were up 5.2 percent at $52.85 in early trade after news that it would join the S&P 500.
Black Diamond Inc shares were up 14.3 percent after the outdoor pursuits equipment and clothing company said it hired advisors to explore strategic alternatives and it reported quarterly results.
Brent crude fell below $54 a barrel in choppy trade as concerns over a growing supply glut weighed on the market. U.S. crude was at $43.11 a barrel, down 74 cents and slightly above 6-year lows of $42.85 marked on Monday. (Reporting By Sinead Carew; Editing by W Simon and Nick Zieminski)