While you were sleeping: Alcoa lifts mood

Wall Street gained, rising for the first day in three, after Alcoa's better-than-expected quarterly profit bolstered optimism about the US second-quarter earnings season.

Shares of Alcoa soared, last up 6.1 percent, after the company posted a quarterly profit that surpassed expectations.

In late afternoon trading in New York, the Dow Jones Industrial Average gained 0.48 percent, the Standard & Poor's 500 index rose 0.62 percent, while the Nasdaq Composite Index added 0.32 percent.

Gains in shares of Cisco and Walt Disney, last up 1.5 percent and 1.3 percent respectively, led the Dow higher.

The Chicago Board Options Exchange Volatility Index, also referred to as the investors' fear gauge, dropped 1.8 percent to 11.76.

Meanwhile the Federal Reserve flagged the timing for completing its monthly bond purchases, as highlighted in the minutes from the latest meeting released on Wednesday, also underpinning the view that the US economy is gathering momentum.

"The market, after digesting the Fed minutes, came to the conclusion that the bond buying program ending in October is a sign of economic strength," Peter Cardillo, chief market economist at Rockwell Global Capital in New York, told Reuters. "So while it was a bit more hawkish, the conclusion is the economy doesn't need any more crutches."

Policy makers have reduced the central bank's monthly bond-buying programme in US$10 billion increments for the past five meetings, downgrading it to US$35 billion in June, from its peak of US$85 billion.

The Federal Open Market Committee agreed that they will continue to cut the programme in US$10 billion increments, with a final US$15 billion reduction after its October meeting, according to the minutes.

The greenback slid to US$1.3643 against the euro, from US$1.3624 before the minutes were released. The US dollar also fell against the Japanese currency.

US Treasuries recovered from an earlier decline. The benchmark US 10-year yield fell one basis point to 2.55 percent after climbing as much as four basis points earlier.

"They have a dovish tone, even though we're seeing a resumption of growth in the second quarter," Michael Materasso, senior portfolio manager and co-chairman of the fixed-income policy committee at Franklin Templeton Investments in New York, told Bloomberg News.

Fed officials expressed concern about trends suggesting investors failed to take risks into account in their investment decisions.

"Signs of increased risk-taking were viewed by some participants as an indication that market participants were not factoring in sufficient uncertainty about the path of the economy and monetary policy," according to the minutes.

In Europe, the Stoxx 600 Index inched lower to close at 339.96. cent. The UK's FTSE 100 fell 0.3 percent. Germany's DAX and France's CAC 40 both gained 0.4 percent.

(BusinessDesk)