Dec 1 (Reuters) - The S&P rose on Wednesday after the previous session"s tumble but pared much of its gains by late afternoon as investors were still jittery about the latest coronavirus variant, surging inflation and U.S. Federal Reserve policy. After advancing as much as 1.9% earlier in the day, the S&P 500 had given up most of these gains by late afternoon, while the Dow and Nasdaq turned negative. The U.S. Centers for Disease Control confirmed the first case of the Omicron variant detected in the country and that the person had returned from South Africa on Nov. 22. Wall Street had tumbled on Tuesday after Fed Chair Jerome Powell said the central bank would consider accelerating the withdrawal of its bond buying program at its December meeting amid a surge in inflation and stronger economy. On Wednesday, Powell said policymakers needed to be ready to respond to the possibility that inflation may not recede in the second half of next year as expected. read more Lauren Goodwin, economist and portfolio strategist at New York Life Investments, said it was not surprising to see volatility as investors digest substantial uncertainties including the lack of information on the Omicron variant and the latest signals from the Fed which are both "potentially major changes in market expectations." However, investors were also reacting to positive economic data that came out on Wednesday morning "reminding investors that the economic and corporate backdrop for this market is really strong." "For many investors, this volatility is a buying opportunity," said Goodwin, who pointed to strong private payroll and purchasing managers data. U.S. manufacturing activity picked up in November amid strong demand for goods. read more By 2:19 p.m. ET (1919 GMT), the Dow Jones Industrial Average (.DJI) fell 15.67 points, or 0.05%, to 34,468.05, the S&P 500 (.SPX) gained 9.13 points, or 0.20%, to 4,576.13 and the Nasdaq Composite (.IXIC) dropped 55.00 points, or 0.35%, to 15,482.69. After rising as much as 2.5% at its late morning peak for the session so far, the Russell 2000 index of small cap companies (.RUT) was last down 0.4%. While all of the 11 major S&P sectors were advancing into the early afternoon, the communications services sector (.SPLRCL) dipped into the red in afternoon trading. The biggest advancer was utilities (.SPLRCU), often seen as a defensive sector, followed by healthcare (.SPXHC). Merck & Co Inc (MRK.N) gained 1% after a panel of advisers to the U.S. Food and Drug Administration narrowly voted to recommend the agency authorize the drugmaker"s antiviral pill to treat COVID-19. read more Like the S&P, the biggest U.S. banks (.SPXBK) pared their gains as the session went on, last trading up less than 1% after rising as much as 2.9% earlier in the day. The World Health Organization said it expects to have more information on the transmissibility of the Omicron variant within days, and that the agency believes the existing COVID-19 vaccines will work against the variant. read more Salesforce.com Inc (CRM.N) forecast current-quarter profit below estimates as it faces stiff competition from rivals including Microsoft, sending its shares down 9.7%.[nL4N2SL4DM] Advancing issues outnumbered declining ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.60-to-1 ratio favored decliners. The S&P 500 posted 13 new 52-week highs and 27 new lows; the Nasdaq Composite recorded 36 new highs and 328 new lows.