Dow Ends Above 13,000; Apple Logs Worst Drop Since 2008

The Dow and S&P came off their highs in the final minutes of trading but still finished higher Wednesday, boosted by a batch of upbeat economic reports and optimistic comments from China's new leader, while Apple's sharp drop pushed the Nasdaq into negative territory.

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Apple tumbled more than 6 percent, logging its worst one-day decline in four years, following news that the company's margin requirements were being raised to 60 percent from 30 percent by COR Clearing. (Read More: Pisani--What's Up with Apple?)

The tech giant is down more than 20 percent from its record high of $705 in September. Apple's chart is close to forming a 'death cross'--where the stock's 50-day moving average falls below the 200-day moving average. Technicians usually see the sign as a cue to sell.

The Dow Jones Industrial Average rallied 82.71 points, or 0.64 percent, to finish at 13,034.49, led by Travelers and Bank of America.

The S&P 500 rose 2.23 points, or 0.16 percent, to close at 1,409.28. The Nasdaq dropped 22.99 points, or 0.77 percent, to end at 2,973.70. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, ended below 17.

Among key S&P sectors, financials and utilities finished sharply higher, while materials ended in negative territory.

"[Apple's] one of the best names out there, but those people who think it's going to have a rocket ship ride to $1,000 may be mistaken because competition is coming in and with a market cap this large, the expectation is quite high for the name," said Colin Gillis, senior technology analyst at BGC Financial. "We'd like to collect premium on the name at these levels." The firm has a $600 price target and a "hold" rating on the company.

But Piper Jaffray said Apple's pullback is a "buying opportunity." The company reiterated its "overweight" rating and $900 price target on the iPhone maker.

Meanwhile, Todd Schoenberger, managing partner of LandColt Capital cited President Obama's latest speech at the Business Roundtable as the reason for the rally.

Obama told business leaders that a deal on the "fiscal cliff" could be reached in a week if Republicans accepted the idea of higher tax rates on the wealthy.

"[Obama] gave a timeline and set a deadline," said Schoenberger. "It was informal, but it was enough to get the market to rally. It's a quick relief rally, but buyer beware—Main Street America will not want to bite."

Ongoing caution over the looming U.S. " fiscal cliff " of tax increases and benefit cuts have kept investors on edge in recent weeks.

Citigroup gained after the financial giant announced it will cut 11,000 jobs as part of restructuring actions in an aim to further lower expenses and improve efficiency. Additionally, the bank said its fourth quarter pre-tax charges will total approximately $1 billion and projected annual expense savings will exceed $1.1 billion starting in 2014. Rivals Bank of American and Morgan Stanley were also sharply higher.

Freeport-McMoRan plunged after the company announced it was buying Plains Exploration & Production andMcMoRan Exploration in two separate deals for approximately $9 billion.

On the economic front, factory orders unexpectedly gained in October, according to the Commerce Department. And the U.S service sector expanded more than expected in November, with the ISM non-manufacturing index gaining to 54.7. A reading above 50 indicates expansion in the sector.

And productivity increased at its fastest rate in two years, according to the Labor Department.

Meanwhile, the private sector created 118,000 jobs in November, according to the latest ADP jobs report, but was still short of expectations for a gain of 125,000. The report comes ahead of Friday's closely-watched government non-farm payrolls report. Economists surveyed by Reuters forecast a gain of 93,000.

Also helping with gains, a speech from China's new leader Xi Jinping fueled optimism that the country would continue to boost global growth. (Read More: China's New Leader Gives Market a Fillip, but Will It Last?)

Facebook climbed after Nasdaq OMX announced late Tuesday evening that the social-networking giant will be added to the Nasdaq-100 index, replacing Infosys. Infosys will be moving its listing to the NYSE from the Nasdaq.

Best Buy said it is changing the payment date of its regular quarterly dividend to December from early January.

Among earnings, Men's Wearhouse is scheduled to post results after the closing bell.

Weekly mortgage applications gained last week as loan requests for new purchases hit a new high for the year, according to the Mortgage Bankers Association.