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NEW YORK (CNNMoney) -- U.S. stocks pushed higher Wednesday, but gains were held in check as investors remain on edge over fiscal cliff negotiations.
The Dow Jones industrial average was up 0.5%, reversing earlier losses. The index was supported by shares of HP (HPQ, Fortune 500) and American Express Co (AXP, Fortune 500), which both gained more than 1%.
The S&P 500 and the Nasdaq also turned higher, gaining 0.4% each.
Trading has been choppy recently as investors react to political developments in Washington, where lawmakers and the White House have been at loggerheads over a slew of year-end tax increases and spending cuts known as the fiscal cliff.
President Obama on Wednesday renewed his call for Congress to pass a bill he says would provide a tax break for middle-class Americans. But the legislation has faced resistance from House Republicans who are opposed to what they see as tax hikes on small businesses.
Senate Majority Leader Harry Reid rattled investors late Tuesday when he reported little progress in the talks.
The fear is that failing to resolve the fiscal cliff before the Jan. 1 deadline could shock the economy and send it back into recession. Investors have been paralyzed by this uncertainty and many expect the stocks to remain volatile for the rest of the year.
"The fiscal cliff malaise is blanketing the market," said Jack Ablin, chief investment officer at BMO Private Bank.
On Wednesday afternoon, a group of CEOs from top U.S. companies will meet with President Obama as part of the "Campaign to Fix the Debt."
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On the economic front, the government said October new home sales fell 0.3% from the month before, although sales were up 17.2% versus October of last year.
The Federal Reserve said economic activity across the central bank's 12 districts expanded at a "measured pace" in recent weeks, according to the latest edition of its Beige Book. The report also said contacts in several Fed districts are concerned about the fiscal cliff.
Meanwhile, gold prices fell sharply as the U.S. dollar strengthened against the euro and the British pound. Oil prices were also pressured by the stronger greenback. In the bond market, yields on U.S. Treasuries moved higher as prices declined.
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In corporate news, big box retailer Costco (COST, Fortune 500) announced a special dividend, which will pay shareholders a total of $3 billion on Dec. 18. Shares rose 4%.
Costco becomes the latest company to move dividend payments to calendar year 2012 as taxes on payments to shareholders are set to rise on Jan. 1, due to the fiscal cliff. Costco rival Wal-Mart (WMT, Fortune 500) is also speeding up those payments.
American Eagle (AEO) shares were up 6% after the apparel retailer reported strong quarterly results. Rival Aeropostale (ARO) will report quarterly earnings and sales data after the closing bell. Shares of troubled retailer JC Penney (JCP, Fortune 500), which have been heavily shorted, rose 4%.
Shares of Green Mountain Coffee Roasters (GMCR) jumped 26% after the K-cup maker issued a better-than-expected outlook for the upcoming fiscal year late Tuesday.
European markets closed higher, while Asian markets ended lower on Wednesday.
The European Commission approved the restructuring plans of four Spanish banks, clearing the way for long-anticipated bailout of those institutions. 
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