U.S. stocks bounced back on Wednesday after suffering a six-session long losing streak, after the Dow Jones Industrial Average advanced from more than 323 points in earlier trading to just under 300 points.

The struggling financial sector enjoyed higher trade after the Fed cut its funds rate, or the interest rate at which banks lend to each other overnight, by 0.75 percent to 3.5 percent.

The biggest banks in the U.S. Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. helped the Dow Jones Industrial Average erase a 326-point loss and led the biggest advance in financial shares in five years.

The Dow closed up 299 points, or 2.5 percent at 12,270.2, with 26 of its 30 components ending in the up. Before Wednesday's session, the Dow had dropped nearly 10 percent since the beginning of the year, and it was down more than 15 percent since its record close of 14,164.53 on October 9.

The S&P 500 Index climbed 28.10 points, or 2.1 percent, to 1,338.60, with the technology-heavy Nasdaq Composite Index gaining 24.14 points, or 1.1 percent to end at 2,316.41.

Financial shares in the S&P 500, which fell 21 percent, last year as the subprime mortgage market collapsed, gained 6.8 percent today for its biggest advance since October 2002.

On the earnings front, Shares of Motorola Inc slipped nearly 19 percent on disappointing results, reporting an 84 percent fourth-quarter profit decline as well as warning that a turnaround in its handset division.

Apple lost $16.57, or 10.6 percent, to $139.07, its biggest tumble since July 2002 after the iPhone maker left investors tense after posting weaker first-quarter profit results and forecasting slower sales growth.