Apple leads Wall Street higher

US stocks closed over 1pc higher in another night of volatile trade, fuelled by a sharp rise in Apple shares.

Volatility has returned to US stocks after being largely absent for most of the northern summer. Pic: AP

Technology stocks led major US indexes higher, the fourth big move in five sessions.

Volatility has returned to stocks after being largely absent for most of the northern summer.

The overnight’s 1 per cent gain for the S & P 500 marked the fourth session out of five in which the index swung 1 per cent or more. Before that the index went 43 trading days without a 1 per cent move.

A sharp rise in Apple shares fuelled gains across major indexes. Apple climbed 3.4 per cent overnight. Over the past four trading sessions, the company’s stock gained 12 per cent.

The Dow Jones Industrial Average rallied 178 points, or 1 per cent, to 18213. The Nasdaq Composite rose 1.5 per cent.

Over the past week, the S & P 500 has fallen 1.6 per cent and the Dow industrials are down about 1.45 per cent.

“I don’t want to say volatility is here to stay, but given the macro backdrop we have here, realised volatility should be here or a little higher over the next few months,” said Justin Wiggs, managing director in equity trading at Stifel Nicolaus.

Europe’s main markets edging higher after hints from the Bank of England that another rate cut could be on the cards this year despite upbeat economic data. The FTSE 100 closed up 0.85 per cent, Frankfurt ended up 0.5 per cent and Paris edged up 0.1 per cent.

Bond markets were choppy again overnight. The yield on the benchmark 10-year US Treasury note rose to 1.703 per cent compared with 1.689 per cent yesterday. Yields rise as bond prices fall.

Oil prices rose, lifting energy companies in the S & P 500 by 1.1 per cent after two days of losses. US crude oil gained 0.8 per cent to $US43.91 a barrel.

In corporate news, shares of Goodyear Tire & Rubber rose 5.1 per cent after the company boosted its dividend and reaffirmed its 2016 guidance.

Stocks and bonds have whipsawed for several days, in response to growing worries that global monetary policy may be less easy than anticipated. European stocks had their longest losing streak since June, following the European Central Bank’s silence last week on whether it would extend bond purchases beyond March.

Investors are “keeping an eye on things with the election and the upcoming Fed meeting on the horizon,” said Stephen Carl, head equity trader at Williams Capital Group.

Brad McMillan, chief investment officer for Commonwealth Financial Network, agreed that many investors remain focused on central-bank policy.

“You’re getting this common narrative from central banks that maybe they’ve done all they can do, and I think that’s worrying markets, but, at the same time, stimulus continues,” he said.

The Bank of England left its key rate unchanged at the conclusion of its monetary-policy meeting yesterday, but suggested that it still expects to cut it again later this year if the UK economy weakens as officials project.

The British pound fell 0.3 per cent against the dollar at $US1.3212. Few investors had expected fresh action after the bank launched a large stimulus package in August in the aftermath of the UK referendum to leave the European Union.

The Stoxx Europe 600 rose 0.6 per cent following five consecutive sessions of declines.

Shares in Japan fell 1.3 per cent as the dollar weakened slightly against the yen and banking and real-estate shares came under pressure. Shares in Hong Kong rose 0.6 per cent, while Australian stocks inched up 0.2 per cent. Stocks in Shanghai were closed for a holiday.

Dow Jones Newswires