Wall Street little changed after two-day rally, GM jumps

Stocks were little changed on Wednesday as investors found scant reason to continue buying following the best two-day rally for the S&P in a month.

General Motors bucked the overall weakness to surge more than 8 percent after the company said it will buy back 200 million of its shares from the U.S. Treasury, which plans to sell the rest of its GM stake over the next 15 months. GM was up 8.6 percent at $27.68.

There was optimism that politicians were getting closer to an agreement to avert the "fiscal cliff" - steep tax hikes and spending cuts that will come into effect in the new year - but that was not enough to push the market higher.

"The question has shifted to what a deal will look like and entail, and markets are taking a pause as we consider that," said Scott Eldridge, director of portfolio management at Caprin Asset Management in Richmond, Virginia.

"It seems like all the parties at the table have made steady progress, but it continues to drown out all the other noise in markets."

Republicans in the U.S. House of Representatives could vote on Thursday on a "Plan B" tax bill that would extend low tax rates, except on income of $1 million and above, though the White House said President Barack Obama would veto the proposal.

Investors are concerned the fiscal cliff could send the economy back into recession, though most expect a deal will be reached eventually.

The Dow Jones industrial average slipped 11.80 points, or 0.09 percent, to 13,339.16. The Standard & Poor's 500 Index eased 2.12 points, or 0.15 percent, to 1,444.67. The Nasdaq Composite Index added 0.36 points, or 0.01 percent, to 3,054.89.

Markets have been buoyed in recent weeks by any signs that an agreement between policy makers over the budget may be reached, with banks and energy shares - groups that outperform during periods of economic expansion - leading gains.

The S&P added 2.3 percent over the past two sessions, the first time it has notched two straight days of 1 percent gains since late July. Still, trading has been light ahead of the holidays, and with investors' focus on the budget talks.

Defensive sectors led the downside on Wednesday, with the utilities sector slipping 0.7 percent.

Gains in technology shares boosted the Nasdaq after Oracle reported earnings that beat expectations on strong software sales growth. Oracle jumped 3.4 percent to $34.00, while the tech sector was up 0.1 percent.

Knight Capital Group Inc climbed 6.9 percent to $3.56 after it agreed to be bought by Getco Holdings in a deal valued at $1.4 billion. The stock, which nearly collapsed after a trading error in August, remains down about 76 percent so far this year.

(Additional reporting by Ryan Vlastelica; Editing by Bernadette Baum)