US stocks rise ahead of big Fed meeting

Wall Street stocks pushed higher in a holiday-shortened week, recovering some of the losses from the prior week's plunge ahead of a hotly-anticipated Federal Reserve meeting.

The Dow Jones Industrial Average rose 330.71 points (2.05 percent) to 16,433.09.

The broad-based S&P 500 climbed 39.83 (2.07 percent) to 1,961.05, while the tech-rich Nasdaq Composite Index gained 138.42 (2.96 percent) to 4,822.34.

Analysts said the market was primed to go higher after the rout the prior week. An up week also fit the pattern of the last 10 weeks that has seen the S&P 500 alternate positive and negative results.

That volatility is due partly to fears of slowing economic growth, especially in the world number-two economy China. But analysts also attribute the choppiness to mystery around the Fed.

Top officials from the US central bank have said they plan to lift US benchmark interest rates from near-zero levels some time in 2015. The case for a rate hike has been strengthened by steadily improving US labor data, even as inflation has remained weak.

But the rockiness in global markets over the last month has raised speculation the Fed will hold off in September and perhaps for all of 2015.

"We've seen a lot of volatility because investors have a lot of questions, and the number one question they have right now is: What's the Fed going to do?" said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

"It's very difficult to have convictions in the short-term outlook when there's so much uncertainty on Fed policy," Skrainka said.

"We've entered in a period of frustration for both the bulls and the bears, and it's not going to be resolved until we know what happens with the Fed," said Tom Cahill, portfolio strategist at Ventura Wealth Management.

Questions about the Fed are also casting a shadow over international equity markets, where trade has stayed volatile.

Japan's Nikkei index climbed 2.7 percent for the week, but that was due to a "ridiculous" one-day gain of 7.7 percent gain on Wednesday, said Briefing.com analyst Patrick O'Hare. Earlier that day, Japanese Prime Minister Shinzo Abe had reiterated a pledge to cut corporate tax rates.

"Take that move out of the equation and, well, it's plain to see it wasn't a flat-out bullish week in Japan," said O'Hare, who said advances in the US and other markets "haven't exactly felt solid or entirely satisfactory."

- Mixed reviews for Apple -

The week's biggest corporate story was the launch by Apple of a series of upgraded smartphone, tablet and television products.

Wall Street initially sent Apple shares lower, but shares rallied in the following session. Some analysts believe the outlook for the iPhone is dimming with the maturation of the smartphone market.
But Jan Dawson of Jackdaw Research praised the improved Apple TV, which is expected to become even bigger when the Apple TV service is launched a few months from now.

United Airlines announced the surprise resignation of its chief executive and two other top officials in connection with a federal investigation involving the regional airport authority.

General Electric got a boost when US and European regulators gave the green light to its acquisition of the energy business of French company Alstom. GE said the deal was worth about $9.5 billion following divestments to address antitrust concerns.

Among other transaction, Blackstone struck a $6 billion deal to buy luxury property giant Strategic Hotels & Resorts and Media General reached an agreement to buy media and publishing company Meredith Corporation for $2.4 billion.

Besides the Fed decision and news conference on Thursday with Chair Janet Yellen, next week's calendar includes retail sales and housing starts data for August.