The Dow and S&P 500 gained on Wednesday on reassuring labor market data and Walt Disney's better-than-expected profit, while the Nasdaq dipped as investors took profits on Apple and other bellwether names.

A rise in bank stocks also cushioned the broader market as investors bet that bank capital shortfalls will be manageable the day before stress test results are expected to be unveiled.

Shares of Apple fell 0.9 percent to $131.49, while International Business Machines was the Dow's biggest drag, falling 1.3 percent to $103.95.

The tech sector was one of the few to suffer the least in the market's plunge to 12-year closing lows in early March, and has also served as a major underpinning of the market's rebound from that significant trough.

In economic news, data showed private-sector job losses slowed in April, coming in below expectations and providing further reason for optimism that the U.S. economy has seen the worst before the government's release of the monthly non-farm payrolls report on Friday.

The market got a bit of a lift from the better-than-expected ADP employment report, which indicates that Friday's monthly national jobs report might also show some moderate improvement and indicate that the jobs market may have turned the corner, said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

At this point going forward, investors will need to see a continuation of the trend of positive economic news to help send stocks higher.

The Dow Jones industrial average <.DJI> added 37.91 points, or 0.45 percent, to 8,448.56. The Standard & Poor's 500 Index <.SPX> rose 7.37 points, or 0.82 percent, to 911.17. But the Nasdaq Composite Index <.IXIC> lost 5.69 points, or 0.32 percent, to 1,748.43.

Since hitting a bear market low in early March, the S&P 500 has surged more than 34 percent, driven by optimism about the financial system's condition and hopes the recession may be waning.

Shares of major banks advanced, sending the KBW Bank index <.BKX> up 6.5 percent. About 10 of the 19 institutions under review may need more capital, a person familiar with official talks has said. The results are expected to be unveiled on Thursday.

Bank of America Corp has been told it needs $34 billion of capital to withstand a deep economic downturn, a source said. Its stock rose 9.4 percent to $11.86.

Additionally, Bloomberg reported Wells Fargo & Co will need $15 billion of new capital after the stress tests, while JPMorgan Chase & Co does not need to raise capital after its own stress test. Wells Fargo's stock was up 10.9 percent at $25.74 and JPMorgan was up 4.5 percent at $36.38.

Walt Disney Co gave the Dow its biggest lift, jumping 11.1 percent to $25.72 after the No. 1 U.S. entertainment company posted a quarterly profit above Wall Street's forecasts after Tuesday's closing bell.

Disney's results gave more support to views that the economy may be stabilizing and consumers may be regaining some confidence.

(Editing by Jan Paschal)