Wall Street edge up on earnings; economy woes drag

NEW YORK (Reuters) - Stocks edged higher on Tuesday, boosted by standouts in a bleak earnings season, including American Express , but a record low in consumer confidence revived worries over the economy's health.

American Express led the Dow higher, gaining 5 percent to $15.96 after posting results that surpassed expectations, though like many companies, it warned 2009 will be tough.

"There's been some bright spots (in earnings) but those come amidst reduced expectations, so those come with a grain of salt," said Bruce Zaro, chief technical strategist at Delta Global Advisors in Boston.

The Dow Jones industrial average <.DJI> added 9.40 points, or 0.12 percent, to 8,125.43. The Standard & Poor's 500 Index <.SPX> rose 3.70 points, or 0.44 percent, to 840.27. The Nasdaq Composite Index <.IXIC> was up 7.88 points, or 0.53 percent, at 1,497.34.

But stocks cut gains after the Conference Board's U.S. consumer confidence index fell to a record low in January as the beaten-down housing sector and jitters over job prospects weighed.

"When you have consumer confidence come out and question yet again the strength of any kind of activity economically, you're going to have those gains really pare down," Zaro added.

Limiting gains, Dow component DuPont Co reported a loss, hurt by a decline in demand, and trimmed its full-year 2009 forecast. Shares of the chemical maker were down 3.1 percent at $22.46.

The Federal Reserve's monetary policy setting Federal Open Market Committee begins a two-day meeting on Tuesday and investors will be watching for signals of any nonconventional methods of fighting the credit crisis the Fed might employ.

Economists expect the central bank will leave benchmark interest rates unchanged at zero to 0.25 percent.

(Editing by James Dalgleish)