The US stock market struggled but held its ground on Wednesday as an upbeat assessment of the economy from the Federal Reserve offset drops in bank and energy stocks.

Most stocks finished higher after the Fed said regional economic activity has generally improved since its last snapshot in October. The central bank also said consumer spending has strengthened even as employment and commercial real estate remain weak.

The Dow Jones industrial average slipped 19 points a day after jumping 126. Reports of analysts' warnings about bank stocks hurt financial shares, while a steep drop in oil weighed on energy companies. Airlines jumped on hopes business is stabilizing.

A mixed reading on the labor market also kept trading subdued. The ADP National Employment Report said private companies cut 169,000 jobs in November, fewer than the number lost in October but worse than the 160,000 cuts expected by economists polled by Thomson Reuters. It was the eighth monthly drop.

Investors are focused on the job market, which remains weak despite signs of life in manufacturing, housing and other parts of the economy.

"It all falls apart if you don't get jobs to come around," said Bill Stone, chief investment strategist at PNC Wealth Management.

The ADP report, while it doesn't represent the entire economy, is often seen as a good indicator of what will emerge in the government's closely watched monthly employment report, which is due on Friday. Economists are expecting the unemployment rate remained flat at 10.2 per cent in November.

A rising dollar also cooled the market's advance.

Trading has been volatile in recent days as investors try to determine whether the massive gains in the stock market since early March accurately reflect the economy's strength. Investors have been worried that the nascent recovery could be threatened by economic problems overseas or missteps by the government and the resulting gyrations in the dollar. Concerns over a potential debt crisis in Dubai caused a temporary halt in buying last week.

According to preliminary calculations, the Dow fell 18.90, or 0.2 per cent, to 10,452.68, pulling off of a 14-month high reached Tuesday. The Standard & Poor's 500 index edged up 0.38, or less than 0.1 per cent, to 1,109.24, and the Nasdaq composite index rose 9.22, or 0.4 per cent, to 2,185.03.

Two stocks rose for every one that fell on the New York Stock Exchange, where volume came to 1 billion shares compared with 1.1 billion Tuesday.

The listless trading followed a surge in stocks on Tuesday that was driven by a weaker dollar and higher commodities prices. A months-long slide in the dollar, the result of rock-bottom interest rates, has encouraged investors to buy riskier assets that have the potential to earn better returns.

Analysts say trading likely will remain choppy through the rest of the year due to opposing forces in the market. Some investors are exiting stocks, looking to lock in the gains they've amassed since the rally began in March, while others who may have missed out are looking to get in.

Trading in foreign exchange, commodities and debt markets was mixed as traders remained cautious.

"People don't know where to go," Stone said. "That wait-and-see attitude has kicked in."

The ICE Futures US dollar index, which measures the dollar against other major currencies, edged up 0.3 per cent. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.32 per cent from 3.29 per cent late Tuesday.

Gold prices surged to a new high of $1,218.40 an ounce, while oil prices fell $1.77 to settle at $76.60 a barrel on the New York Mercantile Exchange.

Among financial stocks, Bank of America fell 24 cents, or 1.5 per cent, to $15.65, while Wells Fargo & Co. slid 54 cents, or 1.9 per cent, to $27.45 on reports that some analysts voiced concerns about industry profits next year.

Meanwhile, Chesapeake Energy Corp. fell 70 cents, or 2.9 per cent, to $23.40 as oil fell. Occidental Petroleum Corp. slid 97 cents, or 1.2 per cent, to $81.21.

Airlines rose after Continental Airlines Inc.'s November results weren't as bad as feared and as a Delta Air Lines Inc. official said the carrier would be cautious as it expands. Delta acquired Northwest Airlines last year. Continental rose 71 cents, or 4.8 per cent, to $15.67, while Delta rose 67 cents, or 7.7 per cent, to $9.29.

The Russell 2000 index of smaller companies rose 6.89, or 1.2 per cent, to 596.09.

Overseas, Britain's FTSE 100 gained 0.3 per cent, Germany's DAX index rose 0.1 per cent, and France's CAC-40 added 0.5 per cent. Japan's Nikkei stock average rose 0.4 per cent.