U.S. stocks closed sharply higher on Thursday as investors parsed through a series of economic data as the Federal Reserve's next meeting draws near.
"There are three thing driving today's action," said Michael Arone, chief investment strategist at State Street Global Advisors. "First, Apple is performing better after strong iPhone 7 sales. We've also had a bounce in oil, ... and you've had a number of data that have been tepid at best, and that's making the possibility of a rate hike next week go lower and lower."
The Dow Jones industrial average briefly gained more than 200 points before closing about 180 points higher, with Apple contributing the most gains. The S&P 500 rose 1 percent, with information technology and energy advancing more than 1 percent to lead advancers.
The Nasdaq composite outperformed, rising 1.4 percent, with Apple gaining 3.4 percent. The iPhone maker's stock was up 12 percent for the week and posted its first four-day wining streak with consecutive gains over 2 percent since April 2009.
"I think the market is interpreting the data as it keeping the Fed on the sidelines," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management, but noted that market volatility could increase in the near term. "Typically, when the Fed is at a turning point, volatility picks up. It happened earlier this year and you saw it in 1994."
"I would caution investors to get used to it," he said.
Initial jobless claims came in at 260,000, slightly below expectations, while August PPI came in unchanged, missing expectations. Retail sales for August missed expectations, falling more than expected. Meanwhile, industrial production fell 0.4 percent in August, more than the expected 0.3 percent slide.