U.S. stocks closed higher Thursday, off session highs as a bounce in oil and major stocks failed to completely offset increased uncertainty heading into the Federal Reserve's key meeting next week.
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"I think a lot of this is volatility awaiting the Fed meeting," said Marc Chaikin, CEO of Chaikin Analytics. "There's some good leadership in the market along with Apple and that's always comforting to traders."
The Dow Jones industrial average closed about 80 points higher after gaining as much as 188 points with Apple and UnitedHealth the greatest drivers. The Nasdaq outperformed, briefly gaining more than 1.2 percent, boosted by biotechs and Apple.
"There's still continued lack of conviction and any real liquidity," said Myles Clouston, senior director at Nasdaq. "Investors have been spooked by what's happened in the last month, month-and-a-half."
Apple closed up 2.4 percent, recovering losses of 1.92 percent from Wednesday when it unveiled new iPhones, the iPad Pro and other products. The iShares Nasdaq biotechnology ETF (IBB) briefly jumped more than 2 percent.
"You have a rally in metals, a rally in oil, and here we (were) at the highs of the day," Peter Cardillo, chief market economist at Rockwell Global Capital, said of the intraday rally.
Crude oil settled up $1.77, or 4.01 percent, at $45.92 a barrel, more than reversing Wednesday's 3.9 percent decline. Crude held higher in intraday trade despite weekly inventory numbers that showed a greater-than-expected build of 2.6 million barrels.
Natural gas inventories rose 68 billion cubic feet. Metals, including copper and gold, also gained about half a percent.
"You're basically catalyst-free for the day," said Art Hogan, chief market strategist at Wunderlich Securities. "A little bounce in Apple and WTI — both of those are very constructive."
Still, he emphasized it was a wait-and-see market. "A lot of investors are sitting on the sidelines, waiting for the Fed meeting next week."
Analysts said uncertainty over the timing of a rate hike kept stocks in a trading range.
The Federal Open Market Committee could raise short-term interest rates for the first time in more than nine years at its meeting next Wednesday and Thursday.
"Right now people are betting the Fed will not do anything. I think if the Fed were to increase, (we'd see a) two to three day drop that would scare a lot of people and the market (would) test Aug. 26 lows," Chaikin said.
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Earlier, the major averages shook off a mildly lower open to fluctuate between slight gains and losses. Futures reversed gains in premarket trade to turn lower, with the Dow futures briefly falling more than 100 points.
"He did not give a bullish tone to the market," said John Caruso, senior market strategist at RJO Futures.
The Dow Jones industrial average remained in correction territory, more than 10 percent below the 52-week high hit May 19.
The other major averages held out of correction mode. In morning trade, the S&P 500 was about 4.2 percent above the closing low of the correction hit on Aug. 25. The Dow was also 4 percent above that level, while the Nasdaq was 5.8 percent above that level.
Of the S&P sectors, only utilities was trading below its Aug. 25 close.