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1st LD Writethru: U.S. stocks rebound after two-day losses

Xinhua, June 17, 2015 Adjust font size:

U.S. stocks posted sizable gains on Tuesday after a two-day sell-off, while investors were eagerly awaiting the outcome of a Federal Reserve's policy meeting.

The Dow Jones Industrial Average rose 113.31 points, or 0.64 percent, to 17,904.48. The S&P 500 added 11.86 points, or 0.57 percent, to 2,096.29. The Nasdaq Composite Index added 25.58 points, or 0.51 percent, to 5,055.55.

The Fed kicked off its two-day meeting Tuesday. Though it is unlikely to raise interest rates at this meeting, investors will still follow closely the central bank's statement and Fed Chair Janet Yellen's news conference after the meeting for clues on the timing of a possible rate hike.

Traders will also pay close attention to officials' views on the U.S. economy. The Fed has said it will raise rates only when it sees an improvement in the economy.

On the economic front, privately-owned housing starts in May were at a seasonally adjusted annual rate of 1.036 million units, decreasing 11.1 percent from the revised level of the previous month, the Commerce Department said Tuesday.

"The pullback in housing starts in May is both understandable and expected given April's surge, which was even larger than initially reported. The jump in building permit issuance, however, suggests that the slowdown in May starts should prove temporary," said Sophia Kearney-Lederman, an economic analyst at FTN Financial, in a note.

Overseas, after Greece talks collapsed in the weekend, hopes for a deal now shift to Thursday's Eurogroup meeting in Luxembourg, which many believe is the last chance before Greece's EU bailout expires by the end of June.

Athens does not have plans to present new proposals at that meeting, Greek Finance Minister Yanis Varoufakis told a German newspaper, despite warnings from the rest of Europe that time is running out.

European shares pared early losses to end largely higher on Tuesday, with the French benchmark index CAC 40 rising 0.51 percent.

In Asia, Chinese equities dived on Tuesday, with the Shanghai Composite Index plunging more than 3 percent, driven by an exodus of capital from the stock market. Endite