Wall Street set to slide

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NEW YORK (CNNMoney.com) -- U.S. stocks were set to slide at Tuesday's open, as investors remained on edge at the start of the Federal Reserve's two-day policy meeting.

S&P 500, Nasdaq-100 and Dow Jones industrial average futures were sharply lower.

Futures measure current index values against their perceived future performance and offer an indication of how markets may open when trading begins.

Wall Street staged a late-session rally Monday and finished the day with gains. But trading was volatile as investors remained jittery after the recent selloff.

Trading is expected to continue its choppy trend as investors look for further signs that the economy is indeed recovering.

Investors may take some comfort in the spate of better-than-expected corporate results being reported for the latest quarter. Roughly 70% of the S&P 500 have reported results, which are on track to have fallen 17.5% from a year ago, according to Thomson Reuters. But the current quarter is expected to be much brighter, with forecasts calling for a year-over-year growth rate of 214.9%.

Fed: Investors may stay on the sidelines as central bankers get their two-day meeting underway. The Fed's policy statement is due out Wednesday.

The central bank is widely expected to hold the fed funds rate, a key overnight bank lending rate, at historic lows near 0%. Investors will be tuning into the Fed's statement for any hints as to when it plans to start removing the trillions of stimulus funds it has poured into the economy since the financial crisis took hold.

Other central banks around the globe have been slowly starting to withdraw from their rescue programs, including Australia, whose central bank raised rates for the second straight month on Tuesday.

That has fueled speculation that the Fed could start hiking rates before long.

"We are next," said Anthony Conroy, managing director at BNY ConvergEx Group, noting that a rate hike would pressure already weakened corporate earnings.

According to the Fed's most recent report on activity from regional banks, the U.S. economy has shown mild signs of stabilizing. Housing and manufacturing continued to improve but the labor market remained weak or mixed.

Economy: Investors will digest October auto sales later Wednesday, while a reading on factory orders is due out at 10 a.m. ET. Expectations are for a gain of 1.2%, according to Briefing.com estimates.

Much of this week's attention however is focused on Friday's jobs report, which is expected to show another 166,000 jobs cut in October. That would be on top of the 263,000 that were slashed in the prior month. And the unemployment rate is forecast to inch up to 9.9% from its current 9.8%.

Companies: Warren Buffett's Berkshire Hathaway (BRK.A) announced plans to buy Burlington Northern Santa Fe in a deal valued at $44 billion, including $10 billion in debt.

The Omaha-based conglomerate said it will pay $100 per share in cash and stock to increase its stake in the railroad company to 100%.

Johnson & Johnson (JNJ, Fortune 500) said it plans to cut up to 7% of its global workforce as part of a cost-cutting plan aimed at saving the company up to $1.7 billion by 2011. J&J had 118,700 employees as of last year.

Stanley Works (SWK) has agreed to buy Black and Decker (BDK, Fortune 500) in a deal valued at $4.5 billion, the companies announced late Monday.

Credit card processor Mastercard (MA, Fortune 500) reversed the third-quarter loss of a year ago, earning $452 million, or $3.45 a share, in the most recent quarter.

World markets: Swiss bank UBS reported a much worse-than-expected quarterly loss and issued a cautious outlook.

Lloyds Banking Group and rival Royal Bank of Scotland will get a combined $51 billion in additional aid from the U.K. Treasury.

Major European indexes tumbled in morning trading, with banking shares under pressure. Stocks in Asia finished the session lower.

Oil and currencies: Crude prices for December delivery fell $1.02 to $77.11 a barrel. The dollar was decidedly higher against the euro and the pound. Against the yen, the greenback was modestly lower.