* Apple rallies a day after announcing 7-for-1 stock split
* Caterpillar gains after results; Verizon, 3M fall
* Dow off 0.04 pct; S&P 500 up 0.1 pct; Nasdaq up 0.4 pct (Updates to mid-afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, April 24 (Reuters) - The Nasdaq rose modestly in choppy trade on Thursday as Apple’s shares rallied a day after the iPad maker’s strong results, though tensions in Ukraine held back the broader market.
Caterpillar Inc shares jumped nearly 2 percent and helped limit the Dow’s loss after the world’s largest maker of earth-moving machinery reported earnings that exceeded Wall Street’s expectations.
The three major U.S. stock indexes had opened sharply higher, with the Nasdaq initially climbing more than 1 percent before turning negative in the first half-hour of trading. Wall Street bounced off session lows with gains again concentrated in the Nasdaq, but stocks remained well off earlier highs.
Much of the volatility was driven by comments from Russian Defense Minister Sergei Shoigu, who said Russia started military drills near the border with Ukraine. In addition, Ukrainian forces killed up to five pro-Moscow rebels as they closed in on the separatists’ military stronghold in the east.
Shares of Apple Inc, the most valuable U.S. company by market capitalization, jumped 8.2 percent to $567.86, its biggest gain in two years, a day after the company posted revenue that far outpaced expectations. Apple also approved another $30 billion stock-buyback plan, raised its dividend and authorized a seven-for-one stock split. The S&P information technology index rose 0.9 percent and was the best-performing sector of the day.
“The market is biased - from all of the good news we’ve heard on stocks recently - to go higher,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
“However, there are hot spots in the world that keep flaring up like a campfire that won’t go out, and the market needs to deal with that.”
Caterpillar Inc rose 1.8 percent to $105.22 after the company reported better-than-expected earnings and raised its full-year profit outlook.
Limiting the Dow’s advance were Verizon Communications Inc and 3M Co, whose shares fell after the companies’ results missed expectations. Verizon dropped 2.8 percent to $46.10, while 3M fell 1.1 percent to $136.50.
The Dow Jones industrial average fell 6.96 points or 0.04 percent, to 16,494.69. The S&P 500 gained 2.47 points or 0.13 percent, to 1,877.86. The Nasdaq Composite added 18.155 points or 0.44 percent, to 4,145.122.
Facebook Inc reported a 72 percent jump in first-quarter revenue, lifted by its mobile advertising business, after the closing bell on Wednesday. The stock darted between positive and negative territory, last trading down 0.03 percent at $61.34.
Profits are seen rising 2.9 percent this quarter, down from the 6.5 percent growth rate estimated at the start of the year, but above the low of 0.6 percent seen last week, according to Thomson Reuters data.
Zimmer Holdings Inc agreed to buy Biomet Inc in a deal valued at about $13.35 billion to broaden its portfolio of products that treat bone and joint-related disorders. Zimmer’s stock surged 11.7 percent to $102.17.
A number of cloud-computing stocks, which have struggled lately but rose last week, opened higher and then quickly sold off. Workday Inc slid 6 percent to $72.01 while Salesforce.com fell 1.9 percent to $54.58. (Reporting by Chuck Mikolajczak; Editing by Jan Paschal)