NEW YORK (CNNMoney.com) -- Stocks ended flat Tuesday, capping a rocky session after comments from a Federal Reserve official revived concerns about higher inflation and eroded earlier gains.

The Dow Jones industrial average (down 5.21 to 11,339.84, Charts) ended a few points lower, while the Nasdaq composite (up 2.27 to 2,150.02, Charts) and the Standard & Poor's 500 (up 1.30 to 1,298.82, Charts) index both closed a bit higher.

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All three major gauges had gained through the morning, as investors breathed a sigh of relief that the U.N.'s talks with Iran about its nuclear capabilities look to be moving forward.

However, gains were challenged by revived worries about the economy following afternoon comments from Chicago Fed Bank President Michael Moskow.

Moskow, who is not a voting member of the Fed's policy-making arm, said that upward pressure on inflation could mean that the Fed has to raise rates again.

However, that's pretty much akin to what the Fed said in the statement at the last policy meeting, said Joshua Shapiro, chief economist at Maria Fiorini Ramirez, Inc.

"I think what it [the speech] does is remind markets that there is no guarantee that the Fed is finished raising rates," Shapiro said.

That may be contrary to what investors believed following last week's inflation reports, but it is not contrary to what the Fed has been saying, Shapiro added.

The Moskow comments overshadowed a milder take on inflation delivered earlier in the afternoon from Atlanta Fed Bank President Jack Guynn, who is a voting member of the Fed's policy committee.

Earlier in the month, the Fed opted to hold a key overnight bank lending rate steady at 5.25 percent, after raising it 17 times since June 2004.

Investors are hoping that the Fed won't start raising rates again at the next policy meeting in September. Such hopes were exacerbated last week after a pair of inflationary reports suggested that pricing pressure was mild.

That helped send stocks surging last week. Yet, the advance has hit some resistance this week as oil prices have fluctuated.

Wednesday brings the week's first batch of economic news, with reports expected on weekly crude oil inventories and July existing home sales.

National Semiconductor (Charts) is likely to be active on Wednesday. After the close Tuesday, the chipmaker warned that current-quarter revenue will miss forecasts. Shares lost about 3 percent in extended-hours trading.

Medtronic (Charts), the medical device maker, reported higher quarterly earnings and revenue late Tuesday that topped estimates. Shares gained about two percent after the close.

Advanced Micro Devices (up $1.48 to $24.88, Charts) rose 6.3 percent after Bear Stearns upgraded it to "outperform" from "peer perform."

Toll Brothers (up $0.43 to $25.20, Charts) reported lower third-quarter earnings and cut its full-year outlook, due to the slowing housing market. However, the results and the forecast still topped analysts' estimates and the stock rose Tuesday.

XM Satellite Radio (up $2.28 to $13.52, Charts) surged 20 percent in active Nasdaq trade after Bear Stearns upgraded it to "outperform" from "under perform."

Microsoft (down $0.50 to $25.62, Charts) said it is considering making discounts available during the holidays to compel consumers to update their PCs with the new Vista system, even though the system won't be available until Jan. 2007. Shares lost 1.9 percent.

Candela (down $4.16 to $10.33, Charts) slumped 28.7 percent in unusually active Nasdaq trade. The medical laser maker reported quarterly earnings after the close Monday that fell from a year earlier and missed estimates, owing to higher research and operating costs.

Market breadth was positive. On the New York Stock Exchange, winners topped decliners by nine to seven on volume of 1.21 billion shares. On the Nasdaq, advancers beat decliners by eight to seven as 1.58 billion shares changed hands.

Treasury prices were flat, with the 10-year note yield at around 4.81 percent, little changed from late Monday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar gained versus the euro and the yen.

U.S. light crude oil for September delivery gained 18 cents to settle at $72.63 a barrel on the New York Mercantile Exchange.

Gold prices fell $1.20 to settle at $634 an ounce.

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