Wall Street rebounds on Fed official's dovish comments

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U.S. stocks regained earlier losses and closed in green territory on Tuesday after dovish remarks from a senior U.S. Federal Reserve official.

The Dow Jones Industrial Average rose 31.33 points, or 0.20 percent, to 15,451.01 points. The Standard & Poor's 500-stock Index was up 4.69 points, or 0.28 percent, to 1,694.16 points. The Nasdaq Composite Index increased 14.49 points, or 0.39 percent, to 3,684.44 points.

The market began to rally in the early afternoon after Atlanta Fed President Dennis Lockhart said shortly that recent economic data is too mixed to present a clear picture for the Fed to decide whether to trim its monetary stimulus in September.

The three major stock indices traded in negative territory in most of the morning trading session following tepid economic data.

U.S. retail and food services sales edged up 0.2 percent in July, lower than the upward-revised 0.6-percent increase in June, the Commerce Department said Tuesday. The weak figure missed analysts' forecast of a 0.3 percent rise.

Meanwhile, prices for U.S. imports rose 0.2 percent in July, thanks to rising fuel prices, the Labor Department said. And prices for exports edged down 0.1 percent in July for the second consecutive month.

The monthly Small Business Optimism Index increased a mere 0.6 point to 94.1, the National Federation of Independent Business reported Tuesday.

Besides, U.S. business inventories remained almost flat in June on a monthly basis, following a revised 0.1-percent decrease in the prior month, the Commerce Department said in a separate report.

The CBOE Volatility Index, widely considered as a fear gauge of the market, decreased 3.90 percent to end at 12.31.

In corporate news, shares of U.S. Airways Group Inc. lost 13.07 percent to 16.36 U.S. dollars apiece, after the U.S. Department of Justice on Tuesday filed a civil antitrust lawsuit challenging the proposed merger between U.S. Airways Group and American Airlines' parent AMR Corp. AMR shares plummeted 45.44 percent to 3.17 dollars apiece.

Apple shares surged 4.75 percent to 489.57 dollars after activist investor Carl Icahn said on Tuesday on Twitter that he had a "large position" in the tech giant.

The U.S. equity market last week saw the biggest weekly losses since June on uncertainties over the timing of the Fed's tapering.

In other markets, oil prices gained on Tuesday as U.S. retail sales increased in July. Light, sweet crude for September delivery rose 72 cents, to settle at 106.83 dollars a barrel on the New York Mercantile Exchange. While Brent for September delivery went up 85 cents, to close at 109.82 dollars a barrel.

Gold future for December delivery on the COMEX division of the New York Mercantile Exchange dropped 13.7 dollars to settle at 1, 320.5 dollars per ounce on a strong dollar on Tuesday.

The U.S. dollar advanced against other major currencies on Tuesday. In late New York trading, the euro fell to 1.3206 dollars from 1.3310 dollars of the previous session and the dollar bought 98.23 Japanese yen, higher than 96.68 yen of the previous session.

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