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Wall Street suffered a last-minute hiccup on Wednesday as a triple-digit rally vanished amid tumbling banking stocks, wiping out a largely positive day fueled by a weaker dollar and the Federal Reserve saying interest rates will stay low for an "extended period." 

Today’s Markets

The Dow Jones Industrial Average rose 30.23 points, or 0.31%, to 9802.14, the S&P 500 gained 1.09 points, or 0.10%, to 1046.50 and the Nasdaq Composite sank 1.80 points, or 0.09%, to 2055.52. The consumer-friendly FOX 50 added 1.66 points, or 0.22%, to 766.69.

The late-day slide continues a recent trend of increased volatility on Wall Street that has included a number of unprovoked wild swings such as Wednesday's. While the selloff was led by banks like Wells Fargo (WFC), it didn't appear to be triggered any any new developments. At its highs, the Dow was up as much as 156 points on the day. 

“I think this market is really just confused because we’ve gotten so much conflicting economic data,” said Jonathan Corpina, senior managing partner at Meridian Equity Partners.

Just over half of the Dow's 30 components closed higher, led by drug giant Merck (MRK) and Cisco (CSCO), which rallied before beating the Street after Wednesday's close. The index's biggest percentage losers were JPMorgan Chase (JPM) and Kraft (KFT). 

Even with the afternoon setback, the S&P 500 closed in the green for the third day in a row. The Dow, which dropped 17.53 points on Tuesday, has now alternated between gains and losses for the past seven sessions. The increased volatility on Wall Street has triggered fears that the markets are poised to suffer a correction.

“I think we’re simply going through a normal digestion of gains,” Sam Stovall, chief investment strategist at Standard & Poor’s, told FOX Business.

The selloff from the day's highs was led by the financial sector, which closed 1.4% lower as banks like Morgan Stanley (MS) and PNC Financial (PNC) took a late slide despite an apparent catalyst for the selling. The sector, which enjoyed the biggest gains during the recovery, has run into resistance in recent weeks. 

Wall Street initially held onto a triple-digit rally after the Federal Open Market Committee said it voted unanimously to keep the federal funds rate at a range of unchanged to 0.5% and trim its purchases of agency debt from $200 billion to $175 billion. Wall Street had widely expected the move and the bulls likely appreciated the central bank's statement that said rates will stay very low for an extended period. 

The "Fed seems solely focused on keeping the yield curve as steep as possible in order to further recapitalize the banking system and also to boost the housing market by trying to keep mortgage rates low. They don't care about the U.S. dollar and thus don't care about inflation. Dovish is the word of the day," Peter Boockvar, equity strategist at Miller Tabak, wrote in a note. 

Stocks were driven higher earlier on Wednesday by the U.S. dollar, which plunged more than 1% against the euro, sparking more buying in the commodities complex and boosting multinationals like General Electric (GE) and McDonald's (MCD) that stand to gain from the weak greenback. 

Crude hit session highs after a new inventory report showed gasoline stockpiles fell by more than expected last week. Crude climbed 80 cents a barrel, or 1.01%, to $80.40. Gold jumped to another record high, gaining $2.40 an ounce, or 0.22%, to $1086.70. The higher commodity prices also lifted energy and basic material stocks like Valero (VLO) and Newmont Mining (NEM).

The Institute for Supply Management said its non-manufacturing index fell in October to 50.6 from the previous month's reading of 50.9. While it missed expectations for a reading of 52, the new report indicates a second-straight month of expansion for the U.S. service sector. 

The markets responded favorably to the ADP's employment report, which showed the U.S. lost 203,000 private-sector jobs last month, mostly matching consensus estimates. It could be a good omen ahead of Friday’s more widely-watched and more accurate government jobs report, which is expected to show 175,000 jobs were cut last month and the unemployment rate climbed to 9.9%.

Corporate Movers

Time Warner (TWX) suffered a 38% drop in net income but the media conglomerate’s non-GAAP EPS of 65 cents easily beat the Street. The owner of Time, People and CNN said its revenue slipped 6% to $7.14 billion. Time Warner also lifted its 2009 EPS outlook to at least $2.05, which would exceed consensus estimates.

JPMorgan Chase (JPM) agreed to pay a $75 million fine and forfeit $647 million in interest-rate swap termination fees to settle a probe with the Securities and Exchange Commission over its sale of derivatives to Jefferson County, Ala.

Comcast (CMCSA), the nation’s largest cable provider, posted a 22.5% jump in third-quarter net income and a better-than-expected adjusted-profit of 28 cents a share. However, Comcast’s revenue rose 3% to $8.802 billion, narrowly missing the Street’s view of $8.850 billion.

Garmin (GRMN) posted a better-than-expected non-GAAP profit of $1.02 a share. Analysts had expected a profit of just 69 cents a share. The GPS maker's revenue slid 10% to $781.3 million, compared to consensus forecasts for sales of $704 million.

Liz Claiborne (LIZ) lost 43 cents a share on an adjusted basis last quarter as its sales sank 24% to $769.6 million. Analysts had expected a loss of 20 cents a share and revenue of $799 million. The parent of Lucky Brands said its same-store sales fell 13% last quarter. 

Pulte Homes (PHM) lost a worse-than-expected $1.15 a share during the third quarter as the largest U.S. home builder suffered a 30% drop in revenue and a 23% decline in closings. The company, which recently acquired rival Centex, reported a loss of $1.11 a share in the same period a year ago.

Kraft Foods (KFT) saw its shares slide 3% a day after the food giant beat the Street with EPS of 55 cents but missed analysts' expectations with its revenue outlook. 

TRW Automotive (TRW) drove back into the black during the third quarter with a better-than-expected non-GAAP profit of 68 cents a share. The auto-parts maker’s sales sank 13.5% to $3.1 billion but that easily exceeded estimates. TRW also upgraded its full-year sales guidance said it sees fourth-quarter sales of about $3.2 billion, which would top the Street’s estimates.

Global Markets

Buoyed by the upbeat banking news, European markets bounced back from Tuesday's slide. The U.K.'s FTSE 100 rose 1.4% to 5107.86, France's CAC 40 jumped 2.4% to 3670.33 and Germany's DAX gained 1.70% to 5444.23. 

In Asia, Tokyo's Nikkei 225 rose 0.42% to 9844.31, Hong Kong's Hang Seng advanced 1.76% to 21,614.77 and China's Shanghai Composite climbed 0.46% to 3128.54.