NEW YORK (Reuters) - Stocks advanced in a choppy session on Wednesday as a rally in bank shares and The Travelers, a Dow component, overshadowed Apple's unexpected drop and weakness in the technology sector.
Equities staged a turnaround in the face of a drop in Apple , the largest U.S. company by market capitalization and a big weight in both the S&P 500 and the Nasdaq. Apple's stock fell 4.2 percent to $551.74, after dropping as low as $545.56.
Market participants cited a host of reasons for the slide in the iPad maker's stock, including a consultant's report about the company losing share in the tablet market and reports that margin requirements had been raised by at least one clearing firm.
The S&P 500 reversed course after briefly falling below the 1,400 level, seen as a key support point over the past two weeks.
"There's still psychological interest in buying the market," said John Brady, managing director at R.J. O'Brien & Associates in Chicago.
"The S&P hit the 1,400 level so we find again ‘dip buyers' there. They strongly believe a deal (on the fiscal cliff) is going to get done, and that's really the trade."
Investors have been reluctant to take big positions as lawmakers continue to negotiate a deal to avoid a series of mandatory spending cuts and tax increases effective in early January - known as the "fiscal cliff" - that could push the U.S. economy into recession next year.
President Barack Obama told the Business Roundtable, a group of chief executives, that a "fiscal cliff" deal was possible within about a week if Republicans acknowledged the need to raise taxes on the wealthiest Americans.
For several weeks, the market has reacted quickly to often-conflicting headlines out of Washington about budget negotiations, prompting investors to be cautious.
The Dow Jones industrial average <.dji> gained 123.74 points, or 0.96 percent, to 13,075.52. The Standard & Poor's 500 Index <.spx> rose 6.92 points, or 0.49 percent, to 1,411.97. But the Nasdaq Composite Index <.ixic> dropped 9.51 points, or 0.32 percent, to 2,987.17.
Banking shares were the best performers, led by a 6.4 percent climb in Citigroup to $36.48 after the company said it will cut 11,000 jobs worldwide, or about 4 percent of its workforce. The KBW Bank Index <.bkx> rose 2.1 percent.
Bank of America
Shares of Freeport-McMoRan Copper & Gold Inc
But shares of McMoRan Exploration soared 82.7 percent to $15.46 and Plains Exploration & Production shares surged 25.5 percent to $45.23.
Shares of The Travelers Cos Inc
Economic data from payrolls processor ADP showed U.S. private-sector hiring took a hit in November due to the impact of Superstorm Sandy, which ravaged consumers and businesses in the Northeastern United States, but the huge services sector kept expanding albeit at a modest pace, according to the Institute for Supply Management.
(Additional reporting by Rodrigo Campos; Editing by Jan Paschal)
Wall Street rebounds as banks, Travelers offset Apple
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Wall Street rebounds as banks, Travelers offset Apple
