* China August investment, factory output miss expectations
* U.S. Fed to meet Wednesday and Thursday
* Alibaba falls after Barron’s report
* Apple up after iPhone pre-orders set to beat record
* Indexes down: Dow 0.34 pct, S&P 0.28 pct, Nasdaq 0.04 pct (Updates to open)
By Tanya Agrawal
Sept 14 (Reuters) - U.S. stocks were lower at the open on Monday as a weary market awaited this week’s Federal Reserve meeting that will decide on an interest rate increase.
Stocks are expected to remain volatile in the run-up to the policy meeting on Wednesday and Thursday.
“The uncertainty is so high in regard to the announcement ... it leaves investors a little bit paralyzed relative to what to do in anticipation thereof,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
A Reuters poll showed that a small majority of forecasters still expect a Fed hike on Thursday, though markets-based models suggest policy tightening will be delayed.
At 9:40 a.m. ET (1340 GMT), the Dow Jones industrial average was down 56.39 points, or 0.34 percent, at 16,376.7, the S&P 500 was down 5.52 points, or 0.28 percent, at 1,955.53 and the Nasdaq Composite was down 1.91 points, or 0.04 percent, at 4,820.44.
Nine of the 10 major S&P sectors were lower with the energy index’s 1.19 percent fall leading the decliners.
Oil prices fell more than 1.5 percent on the prospect of dwindling demand, though reduced U.S. drilling, as measured by a rig count, offered some support. Exxon’s 1 percent fall weighed the most on the Dow and the S&P.
Data on Monday showed that growth in China’s investment and factory output missed forecasts in August, raising the chances that China’s third-quarter economic growth may dip below 7 percent for the first time since the global crisis.
Stocks have been volatile for the past few weeks since China devalued its currency in August and the impact of a slowdown in the country on global growth rattled investors. The S&P 500 has had moves of at least 1 percent in more than 10 sessions since Aug. 20.
Wall Street closed higher last week with the S&P 500 and Nasdaq composite posting their biggest weekly gain since July.
The Fed has said it will raise rates when it sees a sustained economic recovery with special emphasis on the job market and inflation.
U.S. data released last week has painted a mixed picture, further clouding the outlook for what the Fed will decide to do this week.
Apple shares were up 1.9 percent at $116.30 after the company said its iPhone pre-orders were on track to beat last year’s first-weekend record.
Alibaba Group Holding fell 2.4 percent to $63.02 after Barron’s said the company’s shares could lose another 50 percent of their value.
Solera Holdings, jumped 9 percent to $53.94 after the company said it agreed to be acquired by an affiliate of private equity firm Vista Equity Partners for $3.74 billion.
Declining issues outnumbered advancing ones on the NYSE by 1,714 to 911. On the Nasdaq, 1,285 issues fell and 951 advanced.
The S&P 500 index showed one new 52-week high and three new lows, while the Nasdaq recorded 15 new highs and 17 new lows. (Reporting by Tanya Agrawal; Editing by Don Sebastian)