Rosengren showed continued support for monetary accommodation in fulfilling the Fed's dual mandate on inflation and employment, while Kocherlakota said that the central bank should provide more monetary accommodation.

The Census Bureau said Tuesday that retail sales rose 0.5% in December after increasing by an upwardly revised 0.4% in November. Economists were expecting a rise of 0.2% in December.

Excluding the auto component, retail sales increased 0.3%, after falling by a downwardly revised 0.1%. Economists were expecting an uptick of 0.2%.

The Bureau of Labor Statistics reported that producer prices fell 0.2% in December after being down 0.8% in November. The core PPI, which excludes food and energy, ticked up 0.1% in December, the same as November. The average estimate was for a 0.1% decline in the headline number and a rise of 0.1% for the core read.

The general business conditions index from the New York Federal Reserve's Empire State Manufacturing Survey was little changed at negative 7.8 for January, compared with December's negative 8.10. A flat read was expected.

The Census Bureau also said that total business inventories increased 0.3% in November, as expected, after rising by a downwardly revised 0.3% in October.

Gold for February delivery surged $14.50 to settle at $1,683.90 an ounce at the Comex division of the New York Mercantile Exchange, while February crude oil futures fell 86 cents to close at $93.28 a barrel.

The benchmark 10-year Treasury rose 6/32 to dilute the yield to 1.831%. The dollar was up 0.29%, according to the U.S. dollar index.

Dell ( DELL), the No. 3 PC maker but once the world's largest, is in buyout talks with private-equity firms, according to Bloomberg, which cited two people with knowledge of the matter.

Shares added 7.2%.

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