US STOCKS-Dow, S&P 500 inch down with Apple, energy stocks

* Fed meeting, more earnings reports awaited

* Apple (LSE: 0R2V.L - news) biggest drag on indexes

* Exxon, Chevron (Swiss: CVX.SW - news) fall as crude prices slip

* Pep Boys up after agreeing to be bought by Bridgestone (Other OTC: BRDCF - news)

* Dow down 0.1 pct, S&P down 0.2 pct, Nasdaq (NasdaqGS: NDAQ - news) up 0.1 pct (Updates to late afternoon)

By Caroline Valetkevitch

Oct (HKSE: 3366-OL.HK - news) 26 (Reuters) - The Dow and the S&P 500 edged lower on Monday after recent gains as energy shares fell with oil prices and Apple retreated a day before its quarterly results.

Apple was down 3.2 percent at $115.22, making it the biggest drag on the three major indexes, after a weak outlook from one of its suppliers, Dialog Semiconductor (Xetra: 927200 - news) .

The iPhone maker reports quarterly results after the market closes on Tuesday. An index of semiconductors was down 1.8 percent.

Investors are also awaiting the Federal Reserve's two-day policy meeting, which begins on Tuesday. While the Fed is not expected to raise interest rates at the meeting, its statement on Wednesday will provide clues on the timing of a rate hike.

The S&P energy sector's 2.4 percent fall led the eight decliners among the major S&P sectors.

"We were pretty extended," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "Thursday was a pretty big move, and Friday kept it going."

U.S (Other OTC: UBGXF - news) . stocks have mostly gained in October after a weak third quarter. The S&P 500 is up 7.9 percent for the month so far.

At 3:10 p.m. the Dow Jones industrial average was down 20.78 points, or 0.12 percent, to 17,625.92, the S&P 500 had lost 3.21 points, or 0.15 percent, to 2,071.94 and the Nasdaq Composite was up 2.91 points, or 0.06 percent, to 5,034.78.

Crude oil prices slipped as global oversupply pushed fuel storage sites close to capacity. Exxon fell 2 percent to $81.32, while Chevron was down 2.6 percent to $88.84.

Strong quarterly results from tech companies have helped improve expectations on overall U.S. third-quarter earnings.

S&P 500 earnings are estimated to have declined a more modest 2.8 percent in the quarter, compared with 4.9 percent forecast at the start of the reporting season, according to Thomson Reuters (Dusseldorf: TOC.DU - news) data.

Housing shares were down slightly. Data showed new U.S. home sales fell 11.5 percent in September, suggesting a softening of the housing market. An index of housing shares was down 0.5 percent.

Fed Chair Janet Yellen has said the U.S. central bank could raise rates this year but only if it sees clear signs of sustained economic growth.

Traders are pricing in only a 6 percent chance of rates being increased at this week's Fed meeting and a 39 percent chance of a December hike, according to CME Group (Kuala Lumpur: 7018.KL - news) 's FedWatch program.

Among other gainers, Pep Boys jumped 23.3 percent to $14.99 after it agreed to be acquired by Bridgestone for $15 per share.

Piedmont Natural Gas rose 36.7 percent to $57.72 after it agreed to be bought by Duke Energy. Duke Energy fell 2.4 percent.

Declining issues outnumbered advancing ones on the NYSE by 1,986 to 1,052, for a 1.89-to-1 ratio on the downside; on the Nasdaq, 1,746 issues fell and 1,033 advanced for a 1.69-to-1 ratio favoring decliners.

The S&P 500 posted 34 new 52-week highs and eight new lows; the Nasdaq recorded 102 new highs and 61 new lows. (Additional reporting by Abhiram Nandakumar in Bengaluru; Editing by Saumyadeb Chakrabarty and James Dalgleish)