US STOCKS-Wall St rebounds with Pfizer and the Fed; Apple sinks

* U.S. durable goods orders unexpectedly plunge in December

Apple shares drop on muted iPhone sales, outlook

* Federal Reserve starts two-day policy meeting

* Dow up 0.6 pct; S&P 500 up 0.6 pct; Nasdaq up 0.4 pct

By Caroline Valetkevitch

NEW YORK, Jan 28 (Reuters) - U.S. stocks bounced back on Tuesday after the S&P 500's three-day slide, helped by Pfizer's upbeat results and as investors turned their focus to the Federal Reserve's next move on stimulus.

Bucking the day's trend, the stock of Apple Inc dropped 8 percent to close at $506.50 - its worst slide in a year - a day after holiday iPhone sales missed expectations. Apple's slide limited the gains of the S&P 500 and the Nasdaq.

Shares of Pfizer Inc jumped 2.6 percent to close at $30.42, boosting both the Dow and S&P 500 after the biggest U.S. drugmaker reported a better-than-expected quarterly profit.

The market's advance, which broke the Dow's five-day losing streak, came after heavy losses tied to concerns about the withdrawal of U.S. monetary stimulus as well as worries about emerging markets, including a slowdown in China's growth and political turmoil from Turkey to Thailand. Last week, the S&P 500 marked its worst percentage loss since June 2012.

"It's a reflex rally. It just technically looked deeply oversold, so it was bound for a small short relief rally," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.

The S&P 500 remains below its 50-day moving average, after closing below it on Friday for the first time since Oct. 9.

A bright spot in the day's economic data was a report showing U.S. consumer confidence rose in January. Consumers grew more optimistic about both business conditions and the job market, according to the Conference Board.

But orders for long-lasting U.S. manufactured goods unexpectedly fell 4.3 percent in December, and a gauge of planned business spending on capital goods also slid, which could cast a shadow on an otherwise bright economic outlook.

The data preceded the start of the Fed's two-day policy meeting. Investors are anxious to hear whether the Fed will cut another $10 billion from its monthly bond-buying program. In December, the central bank announced plans to scale back its stimulus.

The Dow Jones industrial average rose 90.68 points or 0.57 percent, to end at 15,928.56. The S&P 500 gained 10.94 points or 0.61 percent, to finish at 1,792.50. The Nasdaq Composite added 14.354 points or 0.35 percent, to close at 4,097.962.

Recent soft economic data coupled with equity selling in the United States and abroad may have some participants rethinking what the Fed will do next.

"Perhaps there is a growing collection of wisdom (that) the Fed may postpone its tapering," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Apple shares fell to their lowest since October. The tech bellwether's iPhone sales in the holiday shopping season missed lofty expectations and the company forecast weak revenue for the current quarter in its quarterly results.

Shares of Apple suppliers such as Qualcomm Inc also tumbled and pulled on the Nasdaq. Qualcomm dropped 1.7 percent to end at $71.99.

Activist investor Carl Icahn said he bought another half-billion dollars' worth of Apple stock, his third investment in the iPhone and iPad maker in less than a week. The purchase increases his stake to more than $4 billion.