* Apple struggles throughout session, worst day since 2008
* Travelers, Dow's top gainer, to resume stock buybacks
* Citigroup gains on plan to cut jobs, lifting bank sector
* Dow up 0.6 pct, S&P 500 up 0.2 pct, Nasdaq off 0.8 pct
By Ryan Vlastelica
NEW YORK, Dec 5 (Reuters) - A volatile trading session ended
with U.S. stocks mostly higher on Wednesday, even as Apple, the
most valuable company in the United States, suffered its worst
day of losses in almost four years.
In a strange occurrence, Apple accounted for the entirety of
the Nasdaq 100's fall of 1.1 percent, while the Dow
industrials - which do not include Apple as a component -
enjoyed the best day since Nov. 28.
With the drop, Apple shed nearly $35 billion in market
capitalization, its biggest one-day market-cap loss ever. The
company's market value, or market capitalization, now stands at
"Today's move is because of index weightings, with the
Nasdaq down because of Apple's decline," said Rex Macey, chief
investment officer of Wilmington Trust in Atlanta. "The S&P is
up because Apple isn't as big a weight in that index, and the
Dow is up even more because it isn't there at all."
The broad market seesawed, with the S&P 500 dropping into
negative territory before it rebounded off the 1,400 level, seen
as a key support point over the past two weeks. Investors cited
comments from President Barack Obama suggesting a potential
near-term resolution to the "fiscal cliff" wrangling in
Washington as a catalyst for the rebound.
Shares of The Travelers Cos Inc rose 4.9 percent to
$74. The stock ranked as the Dow's top percentage gainer after
the insurance company said it intended to resume stock buybacks
it had temporarily suspended while it assessed its exposure to
Superstorm Sandy. The company also said a preliminary estimate
of net losses from Sandy was about $650 million after tax.
The Dow Jones industrial average rose 82.71 points,
or 0.64 percent, to 13,034.49 at the close. The Standard &
Poor's 500 Index gained 2.23 points, or 0.16 percent, to
1,409.28. But the Nasdaq Composite Index fell 22.99
points, or 0.77 percent, to end at 2,973.70.
Apple, the largest U.S. company by market capitalization and
a big weight in both the S&P 500 and the Nasdaq, fell 6.4
percent to $538.79. Apple is down more than 20 percent from an
all-time high reached in late September, putting the stock into
bear market territory.
Banking shares were led higher by a 6.3 percent jump in
Citigroup to $36.46 after the company said it would cut 4
percent of its workforce. The S&P financial
sector index climbed 1.3 percent, and Bank of America
hit a 52-week high of $10.55 before pulling back slightly. The
stock, a Dow component, ended at $10.46, up 5.7 percent for the
Cyclical sectors, which are tied to the pace of economic
growth, rallied on optimism about progress on a solution to
avoid the fiscal cliff. An S&P index of industrial stocks
rose 1.1 percent, buoyed by Caterpillar Inc, up
2.2 percent at $86.05, while an S&P index of energy shares
climbed 0.7 percent. The Dow Jones Transportation
Average gained 0.9 percent, with CSX Corp jumping
2.7 percent to $20.16.
Still, Apple struggled throughout the session. Market
participants cited a host of reasons for the drop 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, as
well as year-end tax selling ahead of a possible rise in
capital-gains tax rates next year.
On the Washington front, Obama told the Business Roundtable,
a group of chief executives, on Wednesday that a fiscal cliff
deal was possible "in about a week" if Republicans acknowledged
the need to raise taxes on the wealthiest Americans.
Equities have struggled to gain ground recently because of
concerns over the fiscal cliff - a series of mandatory spending
cuts and tax increases effective in early January that could
push the U.S. economy into recession next year. Recently
equities have moved on any whiffs of sentiment from Washington
in headlines about negotiations.
"Obama's comments generated a lot of optimism, but to the
extent the market believes them, that's how much we're setting
ourselves up for a decline if that deadline passes with no
progress," said Macey, who helps oversee about $20 billion in
In an interview on CNBC after the market closed, U.S.
Treasury Secretary Tim Geithner said that uncertainty over the
fiscal cliff was standing in the way of stronger economic
growth, and that there was no prospect for an agreement if tax
rates didn't rise on the wealthiest taxpayers.
The stock of Freeport-McMoRan Copper & Gold Inc fell
16 percent to $32.17 and ranked as the S&P 500's biggest
percentage decliner. The company said it was acquiring Plains
Exploration & Production Co and McMoRan Exploration Co
in two separate deals for $9 billion in cash and stock
in a major expansion into energy.
McMoRan Exploration soared 87 percent to $15.82 and Plains
surged 23.4 percent to $44.50.
About half of the stocks traded on the New York Stock
Exchange closed in positive territory, while about 54 percent of
Nasdaq-listed shares ended lower.
Volume was higher than it has been in recent sessions, with
about 6.93 billion shares changing hands on the New York Stock
Exchange, the Nasdaq and NYSE MKT, above the daily average so
far this year of about 6.48 billion shares.