NEW YORK (AFP) - US stocks finished higher on Friday following a choppy session as investors looked ahead to next week's Federal Reserve policy meeting.

The Dow Jones Industrial Average advanced 102.69 points (0.63 per cent) to 16,433.09.

The broad-based S&P 500 gained 8.76 (0.45 per cent) to 1,961.05, while the tech-rich Nasdaq Composite Index rose 26.09 (0.54 per cent) to 4,822.34.

"It's just traders squaring positions before the weekend," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

"All eyes will be on the Fed next week."

The Fed on Wednesday will kick off a two-day monetary policy meeting to weigh the first rate hike in over nine years.

Some analysts see lower odds for a September increase given the volatility in global markets.

Among Dow companies, large gainers included Apple (+1.5 per cent), Disney (+1.8 per cent) and McDonald's (+2.3 per cent).

Yahoo climbed 0.9 per cent on news that chief marketing officer Kathy Savitt will leave for a post at television and film industry studio STX Entertainment.

Some petroleum-linked stocks fell on the latest drop in oil prices. Apache and Weatherford International both shed 1.6 per cent, while ConocoPhillips lost 2.2 per cent.

Chipmaker Marvell Technology Group sank 16.2 per cent as it disclosed that its audit committee had initiated an independent investigation of the company's accounting and internal controls. As a result, the company delayed release of its second-quarter financial statements.

Supermarket chain Kroger jumped 5.3 per cent as it lifted its 2015 profit forecast range from US$1.90-US$1.95 per share to US$1.92-US$1.98 per share.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.19 per cent from 2.23 per cent Thursday, while the 30-year dropped to 2.95 per cent from 2.99 per cent. Bond prices and yields move inversely.