US STOCKS-Wall St edges higher in late trading

* Chinese factory activity contracts at fastest pace since 2012

* Twitter (Xetra: A1W6XZ - news) jumps after rumors of private equity deal

* Indexes up: Dow 0.2 pct, S&P 0.3 pct, Nasdaq (NasdaqGS: NDAQ - news) 0.4 pct (Updates to late afternoon)

By Caroline Valetkevitch

Feb 1 (Reuters) - U.S (Other OTC: UBGXF - news) . stocks edged higher in late Monday trading, reversing earlier losses, helped by strong gains in Facebook (NasdaqGS: FB - news) and Alphabet (Xetra: ABEA.DE - news) .

Internet giant Alphabet, which reports results after the close, was up 1.5 percent at $772.98. Toymaker Mattel, down 2.3 percent at $26.94, is also due to report after the close.

Twitter was up 6.1 percent at $17.82 after talk of a private equity deal.

Stocks had been lower earlier in the day as weak Chinese economic data added to concerns about a global slowdown and oil prices resumed their slide. The manufacturing sector in the world's second-largest economy contracted in January at the fastest pace since 2012.

"If you see strength in the last hour, that's very bullish," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

"What this is telling me is that maybe we don't want to be short going into a period of time when maybe the Fed is backing off of its rate increases."

Slammed by collapsing oil prices, stocks have had a volatile start to the year. Coming off the worst January since 2009, the S&P 500 is down more than 5 percent for the year.

Traders now expect the Fed to scale back the number of rate hikes this year. They are pricing in only a 17-percent chance that the Fed will raise rates in March, according to CME Group (Kuala Lumpur: 7018.KL - news) 's FedWatch.

At 3:26 p.m., the Dow Jones industrial average was up 35.99 points, or 0.22 percent, to 16,502.29, the S&P 500 gained 5.66 points, or 0.29 percent, to 1,945.9 and the Nasdaq Composite added 20.30 points, or 0.44 percent, to 4,634.26.

Fourth-quarter corporate reporting season is well under way, with S&P 500 companies, on average, expected to post a 4.1 percent drop in earnings, according to Thomson Reuters (Dusseldorf: TOC.DU - news) data.

Chipotle Mexican Grill (NYSE: CMG - news) was up 4.9 percent at $475.27. The U.S. Centers for Disease Control and Prevention (CDC (LSE: 0DXD.L - news) ) said E.coli outbreaks that affected the burrito chain's customers last year appeared to be over. (additional reporting by Tanya Agrawal; Editing by Don Sebastian and Nick Zieminski)