* U.S. durable goods orders unexpectedly plunge in December
* Apple shares down on muted iPhone sales, outlook
* Federal Reserve to begin two-day policy meeting
* Indexes: Dow up 0.4 pct; S&P 0.5 pct; Nasdaq up 0.2 pct
NEW YORK, Jan 28 (Reuters) - U.S. stocks edged up on Tuesday after a three-session decline on the S&P 500, but an unexpected drop in durable goods orders in December and disappointing iPhone sales at tech giant Apple kept investors on edge ahead of a two-day Federal Reserve meeting.
Apple Inc shares fell nearly 7 percent to $512.70 a day after iPhone sales in the holiday shopping season missed lofty expectations and the company forecast weak revenue for the current quarter.
At least 12 brokerages lowered their price targets on Apple's shares, reflecting concerns that it was becoming harder to sell high-end phones as markets become saturated. The stock had gained a quarter of its value in the last six months.
Orders for long-lasting U.S. manufactured goods unexpectedly fell 4.3 percent in December as did a gauge of planned business spending on capital goods, which could cast a shadow on an otherwise bright economic outlook.
The durable goods report precedes a two-day policy meeting of the U.S. Federal Reserve, which is expected to announce another $10 billion reduction in its monthly bond-buying program.
"Investors have suffered a significant bruising over the past several trading sessions and the market is due for a bounce," said Andrew Wilkinson, chief market analyst at Interactive Brokers LLC in New York.
"On the negative side, this report (durable goods orders) does smack of a slowdown in the U.S. economy, a feature missing from other recent data with the exception of a weather-distorted payroll reading," he said.
The S&P 500 has fallen for three consecutive sessions on concerns about more withdrawal of U.S. monetary stimulus and slowing Chinese growth, which amplified country-specific political turmoil from Turkey to Thailand. Last week, the broad market index posted its worst percentage loss since June 2012.
In a rebound on Tuesday, the Dow Jones industrial average rose 61.14 points or 0.39 percent, to 15,899.02, the S&P 500 gained 8.12 points or 0.46 percent, to 1,789.68 and the Nasdaq Composite added 6.035 points or 0.15 percent, to 4,089.644.
In other earnings, Pfizer Inc reported better-than-expected fourth-quarter results, helped by sales of new treatments for cancer, nerve pain and arthritis, sending shares up 2.7 percent at $30.47.
Another bright spot was data that showed U.S. consumer confidence rose in January as consumers grew more optimistic about both business conditions and the job market, according to a private sector report released on Tuesday.
U.S. single-family home prices in November rose slightly more than expected from the previous month, while the increase from a year ago was the biggest in almost eight years, a closely watched survey said on Tuesday.