The Dow industrials slipped and the S&P 500 was up slightly on Wednesday as news that International Business Machines Corp was in talks to buy Sun Microsystems pulled IBM's stock lower, more than offsetting a rise in financials.
But the Nasdaq rose as investors snapped up shares of technology bellwethers, including Apple
Investors were cautious before the Federal Reserve's policy statement at 2:15 p.m. EDT
Shares of Sun Microsystems
IBM's stock fell 2.7 percent to $90.45, which weighed on the Dow. IBM, with more than $120 billion in market capitalization, can determine the direction of both the Dow average and the broader market.
Shares of computer maker and Dow component Hewlett-Packard
The Dow Jones industrial average <.DJI> fell 48.67 points, or 0.66 percent, to 7,347.03. The Standard & Poor's 500 Index <.SPX> edged up 0.63 of a point, or 0.08 percent, to 778.75. The Nasdaq Composite Index <.IXIC> gained 10.83 points, or 0.74 percent, to 1,472.94.
But a rise in financial shares helped cushion the broader market, following comments from Bank of America's chief executive, who said the largest U.S. bank could repay $45 billion in government funds this year.
The KBW bank index <.BKX> rose 5.5 percent and extended its rally from last week to about 50 percent. Citigroup
With the Federal Reserve already having cut interest rates close to zero, investors now are focused on whether the U.S. central bank will commit to buying long-dated government debt as an additional measure to revive the economy.
A Fed statement is due around 2:15 p.m. EDT.
(Editing by Jan Paschal)