U.S. stock index futures pointed to a flat to higher open on Wall Street on Tuesday, after Alcoa slashed its dividend and issued a plan to raise cash, and ahead of the Federal Reserve's two-day policy-setting meeting.

European shares fell in early trade on Tuesday, snapping a five-day winning streak, with banks and mining shares trimming recent lofty gains <.EU>, while Asian stocks gained ground overnight, with the Nikkei average <.N225> rising 3.2 percent <.T>.

Alcoa Inc shares traded in Frankfurt were down 12 percent after it said on Monday it would slash its dividend, issue stock and convertible notes worth about $1.1 billion and trim its 2010 spending to help weather the steep downturn in aluminum demand.

On the macro front, investors were bracing for U.S. data on housing starts in February, as well U.S. monthly price producer data. The focus will also be on a two-day U.S. Federal Reserve meeting starting later in the day.

The Fed, which has slashed interest rates to revive the economy, has considered the purchase of long-dated government debt as an additional measure, but a number of policymakers have sounded skeptical about the idea and few Fed watchers expect such a move this week.

The two-day policy-setting meeting will conclude with a statement around 4:15 p.m. EDT on Wednesday.

In corporate news, Walt Disney Co. has put an expansion of its Hong Kong theme park on hold after failing to agree with the city's government on a cash infusion, the company said on Tuesday.

U.S. stocks fell on Monday after American Express Co said the number of people struggling to make credit card payments grew, erasing earlier optimism that banks could return to profit in the downturn.

The Dow Jones industrial average <.DJI> shed 7.01 points, or 0.10 percent, to 7,216.97. The Standard & Poor's 500 Index <.SPX> declined 2.66 points, or 0.35 percent, to 753.89. The Nasdaq Composite Index <.IXIC> lost 27.48 points, or 1.92 percent, to 1,404.02.

(Reporting by Blaise Robinson; editing by Simon Jessop)