While you were sleeping: UPDATED Wall Street steadies after high volatility

Stocks on Wall Street steadied after three days of wild swings as investors positioned themselves for a US Federal Reserve policy meeting next week.

The latest expectations have swung back to bets the central bank will not move on interest rates.

At the close, the Dow Jones Industrial Average eased  31.98 points, or 0.2%, to 18,034. The Nasdaq Composite Index advanced 0.4% to 5173.37, while the Standard & Poor's 500 Index eased just 1.25 points to 2125.

The S&P 500 fell 2.5% on Friday, rose 1.5% on Monday and fell 1.5% again on Tuesday.

"It has been a zero conviction market, in line with fragile global sentiment," London-based BGC Partners strategist Michael Ingram told Bloomberg.

"There is a lot of noise right now, mostly the result of central-bank policy uncertainty. It seems that the view we need higher rates is gaining some traction, but at the same time we still have expectations of further easing in some countries.

"It's difficult to achieve a coordinated response. This policy disarray is one source of the volatility we are seeing."

US Treasurys rose, amid fresh bets the Fed won't raise rates during its two-day meeting beginning on September 20. Benchmark 10-year notes climbed, pushing yields four basis points lower to 1.69% from 1.73% on Tuesday, the highest since the June 23 Brexit referendum.

"More than rates, the curve shape has been consistent, and telling a strong story," New York-based BMO Capital Markets fixed-income strategist Aaron Kohli says. BMO is one of the 23 primary dealers that trade with the Fed. "Everyone thinks the Fed will be on hold forever," Mr Kohli says.

Apple trades higher
The Dow moved lower as slides in the shares of American Express and IBM, each down 1% and 2.7%, outweighed gains in the shares of Apple, which traded 3.6% higher.

Apple shares touched the highest level this year, amid indications of strong demand for its newly released iPhone 7.

Meanwhile, rival Samsung is struggling with a recall of its Galaxy Note 7 phones after incidents of its batteries catching fire while charging.

"With the carriers telling Samsung owners that Samsung wants you to take your phone back to the store, well, people are going to look elsewhere," Longbow Research analyst Shawn Harrison told Reuters.

Bayer-Monsanto deal closer
In corporate news, Monsanto's shares rose after Germany's Bayer agreed to buy the US seeds company in a deal worth about $US66 billion, the largest this year. 

But investors are still concerned about regulatory hurdles. Bayer has agreed to pay $US128 a share for Monsanto; the Leverkusen-based company first offered $US122 a share in May, then $US125 in July and raised it to $US127.50 last week.

Closing is expected by the end of 2017, the companies say. Bayer says it agreed to a $US2 billion reverse antitrust break fee, "reaffirming its confidence that it will obtain the necessary regulatory approvals."

Investors aren't as confident. Monsanto shares traded 1% higher at $US107.20 in New York, after rising as high as $US107.75 earlier in the session. Bayer shares closed 0.7% higher in Frankfurt.

"We expect significant antitrust and political hurdles and assign 50% probability of deal completion," analysts at Sanford C Bernstein & Co said in a note, Bloomberg reported. "The market seems to agree."

In Europe, the Stoxx 600 Index ended the session with a decline of 0.1% from the previous close. Germany's DAX index also slipped 0.1%, while France's CAC 40 index fell 0.4%. The UK's FTSE 100 Index rose 0.1%.

(BusinessDesk)

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