U.S. stocks pare losses amid Fed officials' remarks

U.S. stocks traded in a range on Monday, as investors became nervous amid remarks by U.S. Federal Reserve officials and pondered that the central bank might hike interest rate as early as next week.

At midday, the Dow Jones Industrial Average gained 75.19 points, or 0.42 percent, to 18,160.64. The S&P 500 was up 12.09 points, or 0.57 percent, to 2,139.90. The Nasdaq Composite Index rose 42.30 points, or 0.83 percent, to 5,168.21.

Atlanta Fed President Dennis Lockhart said current economic conditions called for a "serious discussion" on rates at the September meeting, media reported.

"All of the recent 'Fed Speak' has come from a hawkish perspective," said Stephen Guilfoyle, chief market economist at Stuart Frankel & Co., Monday, "What this has done is force traders across every asset class to re-price their merchandise."

Boston Fed President Eric Rosengren said in a speech last week that low interest rates are increasing the chance of overheating the U.S. economy. Gradually tightening monetary policy is appropriate to maintaining full employment, he added.

Traders have expected a 24 percent rate hike in September, according to CME Group's FedWatch tool.

The Federal Open Market Committee, the Fed's monetary policy arm, is set to meet on Sept. 20-21.

U.S. stocks ended sharply lower on Friday, the worse decline since June 24, as fears that the Fed may raise interest rate this month had sent equities markets tumbling.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, soared 39.98 percent to end at 17.50 on Friday. Enditem