NEW YORK (AFP) - US stocks finished a buoyant week on an up note, with the tech-rich Nasdaq enjoying the biggest gains thanks to Apple.

The Dow Jones advanced 33.74 points (0.2 per cent) to 17,084.49, while the broad-based S&P 500 added 1.46 (0.07 per cent) at 2,014.89.

The Nasdaq Composite Index climbed 19.68 (0.41 per cent) to 4,830.47, lifted by a 2.4 per cent gain in Apple.

Analysts said investor sentiment had improved thanks to rising confidence the US Federal Reserve will hold off on hiking interest rates until next year.

"Investors want to rally on the idea the Fed is on hold at least for the foreseeable future and the economy is still doing OK and rates are going to remain low for a considerable period of time," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

Shares of large banks were lower, including Bank of America (-1.1 per cent), Citigroup (-0.5 per cent) and Wells Fargo (-0.8 per cent). Higher interest rates lift bank profits.

Alcoa tumbled 6.8 per cent after it reported, after markets closed Thursday, a 70.4 per cent drop in third-quarter earnings to US$44 million (S$60 million). The metals giant trimmed its outlook for key Chinese businesses.

American Airlines surged 6.7 per cent, while United Continental climbed 6.6 per cent after both companies reported higher customer traffic in September.

Youth-oriented apparel retailer Gap slumped 5.3 per cent as September comparable sales fell one percent compared with the year-ago period.

Electric car manufacturer Tesla Motors lost 2.7 per cent after the company was downgraded by Barclays, which cited the company's engineering challenges and predicted a slow production ramp-up.

International Paper gained 5.2 per cent after announcing it will sell its 55 per cent stake in its Chinese coated-board joint venture to its Chinese partner, Shandong Sun Holding Group for about US$23 million. The transaction will also permit International Paper to remove about US$400 million in debt from its balance sheet.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.09 per cent from 2.1 per cent Thursday, while the 30-year dipped to 2.92 per cent from 2.94 per cent. Bond prices and yields move inversely.