Wall St lifts higher in late trade

US stocks turn higher as investors look forward to guidance from incoming Federal Reserve boss Janet Yellen on stimulus.

US stocks turned higher in late in the session, as investors weighed the outlook for central-bank stimulus efforts.

The Dow Jones Industrial Average gained 21 points, or 0.1%, to 15,771. It was down 79 points at its session low. The S&P 500 index gained seven points, or 0.4%, to 1,775 and the Nasdaq Composite Index added 28 points, or 0.7%, to 3,948.

Stocks opened with broad declines on the back of global losses, but drifted off their session lows in morning trading and turned higher after the close of European stock markets.

"After the subtle selling we've seen [this week], investors are trying to position themselves for the rest of the week," said Jonathan Corpina, senior managing partner with brokerage firm Meridian Equity Partners Inc. The S&P 500 slipped 0.2% over the first two sessions of the week.

Wednesday's economic calendar was relatively light, but Thursday will bring the confirmation hearing for Janet Yellen - seen as a proponent of easy-money policies - to head up the Federal Reserve. Investors will be watching Ms Yellen's testimony closely for any clues as to when the Fed will pare, or taper, its easy-money policies. Stock benchmarks have gyrated in recent weeks on shifting investor expectations for the timing of the central bank's next move.

"The market has two big forces that are almost in equal balance here," said John Merrill, founder of Tanglewood Wealth Management, which manages $US800 million ($860 million). "People want to move money into the market...it's been, by far, the best game in town. Then you have this huge uncertainty created by the Fed and government policies in general."

Tanglewood raised its cash levels this summer in anticipation of more volatility. But not all investors expect market fireworks from Ms Yellen's testimony.

"I don't think you're going to get any sense of where monetary policy is going in the near term," said Cam Albright, director of asset allocation with Wilmington Trust Investment Advisers, which manages $US20 billion. "That leaves us with a lot of uncertainty."