Wall Street failed to stage a rally Tuesday even as financial stocks rebounded and crude oil prices slid by $3 on a stronger U.S. dollar. 

Today's Market

The Dow Jones Industrial Average rose 9.94 points, or 0.08% to 12289.76, the Standard & Poor’s 500 index fell 3.32 points, or 0.24%, to 1358.44 and the Nasdaq Composite Index slid 10.52 points, or 0.43%, to 2448.94. The consumer-friendly Fox 50 rose 1.38 points, or 0.14%, to 960.13.

Wall Street flip-flopped between positive and negative territory throughout the day as traders searched for direction and rising financial stocks were canceled out by declining energy names. 

Coca-Cola (KO) rose nearly 4% to lead the Dow on Tuesday after the beverage giant was upgraded to "buy" from "hold" by Deutsche Bank (DB). Also, financial giants JPMorgan Chase (JPM) and Citigroup (C) bounced back after a series of losing days. 

On the downside, energy titans ExxonMobil (XOM) and Chevron (CVX) declined along with the rest of the energy sector. 

The Nasdaq Composite closed in the red for the third straight day. The index had lost 3.5% of its value over the prior two trading days, the largest two-day percentage drop since March 17. Chip maker Nvidia (NVDA) and GPS maker Garmin (GRMN) led the decliners on the Nasdaq 100, falling 6% each. 

“Last Tuesday it looked like the recession might be over. Today it looks like the recession might be back," Alan Valdes of Hilliard Lyons told FOXBusiness. "Heads are spinning; [traders] don’t know which way to turn.”

Also weighing on the market on Tuesday were inflation fears and the policy implications that go along with them. The worries stem from a speech made by Federal Reserve Chairman Ben Bernanke, who signaled that the central bank will have to pay more attention to inflation. 

"There are fears that the Federal Reserve may have to be really aggressive in raising interest rates if we see some ugly inflation numbers this week," said Peter Cardillo, chief market economist at Avalon Partners. 

However, the Fed speech helped boost the U.S. dollar against rival currencies. The greenback gained more than 1% versus the Euro on Tuesday. 

As a result of the stronger dollar, crude oil prices pulled back again on Tuesday, falling more than $3. The decline came as International Energy Agency slashed its global demand forecast and upgraded its production estimates.

Oil closed $3.04 lower at $131.31 a barrel. Energy stocks fell across the board, with names like Hess (HES) and Schlumberger (SLB) closing firmly in the red. 

"You’d think with oil coming off like it has there’d be some buoyancy to the market. I think we have to see which way oil goes over the next few sessions," said Stephen Carl, head trader at Williams Capital. 

While OPEC Secretary General Abdullah al-Badri told Reuters that the market is "panicking" and appealed for calm, more energy executives predicted even higher prices. Alexei Miller, CEO of Russian gas monopoly Gazprom, predicted that oil will approach $250 a barrel in the foreseeable future, according to Dow Jones. 

Financial stocks provided some strength for Wall Street after consecutive days of big losses. JPMorgan, which suffered a 6% decline on Monday, was among the leaders on the blue-chip index on Tuesday. Also, Washington Mutual (WM) rebounded after it plunged 12.5% over the prior two trading days and closed at its lowest level in nearly 16 years. 

On the other hand, investment bank Lehman Brothers (LEH) continued to struggle, losing another 7% of its value. Lehman released its first-ever quarterly loss on Monday and announced plans for a $6 billion capital raise.

Bernanke's speech sent Wall Street to a sharply lower open on Tuesday. The Fed chief said the central bank "will strongly resist an erosion of longer-term inflation expectations'' -- the most hawkish statement Bernanke has made about inflation. 

Bernanke signaled Monday evening that he won't be pushing to lower interest rates any further to combat slower economic growth. In fact, some on Wall Street now expect the Fed to raise rates to fight inflation as early as August.

“Despite the unwelcome rise in the unemployment rate that was reported last week, the recent incoming data, taken as a whole, have affected the outlook for economic activity and employment only modestly,” he said. “Indeed, although activity during the current quarter is likely to be weak, the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”

Since the subprime fiasco last summer the Federal drastically brought the country's Federal Funds rate down from 5.25% to 2% to get banks lending to each other and consumers again. 

Bernanke's speech affected the global markets as well. In Asia, Hong Kong stocks closed down a massive 4.2% while the Shanghai Composite Index lost 7.7% of its value to close at its lowest level since March 2007.

Corporate Movers

XTO Energy (XTO) plans to acquire privately-held Hunt Petroleum for $4.19 billion in a cash and stock deal. XTO, which is a natural gas producer, will pay $2.6 billion in cash and 23.5 million shares of common XTO stock worth $67.50 each. Additionally, XTO will acquire 1.052 trillion cubic feet of natural gas equivalent in reserves.

General Electric's (GE) appliance unit could be sold to Chinese company Qingdao Haier, the Financial Times reported. Haier is considering such a move and has started to talk to investment banks, the newspaper reported. 

National City (NCC) rose almost 4% after the bank said it has no material issues with regulators since it raised $7 billion to boost liquidity. The Cleveland-based bank made the comments while confirming it entered into Memoranda of Understanding with both the Office of the Comptroller of the Currency and the Federal Reserve Bank of Cleveland. National City said the MOU's addressed "issues of capital management, risk management, asset quality and liquidity management which have already been publicly disclosed and discussed." 

Pinnacle Airlines (PNCL) lost more than a quarter of its value after it disclosed it will no longer be a Connection partner with Delta Airlines (DAL) as of July 31. Calling the termination "wrongful," Pinnacle said the change won't have an immediate effect on schedules, routes or staffing. Pinnacle said Delta contends it did not meet minimum arrival-time performance for a period of flights. 

Texas Instruments (TXN) fell nearly 3% after it lowered its second-quarter earnings and revenue forecasts. TI, which makes chips and graphing calculators, now sees earnings of 43 cents to 47 cents per share on revenue of $3.33 billion to $3.46 billion, citing "unseasonably weak" sales. 

Data Dump

The U.S. trade deficit grew in April to the highest level in 13 months, the Commerce Department said. Boosted by higher crude oil costs, the gap between imports and exports jumped by 7.8% to $60.90 billion. According to Dow Jones, the market had been expecting a smaller rise to $60 billion.