The markets closed with a mixed verdict on Wednesday as the Nasdaq Composite’s two-day slide was brought to an end but a recovery in oil prices wasn’t enough to stop the bleeding in the broader indexes.

Today’s Markets

The Dow Jones Industrial Average slid 7.49 points, or 0.09%, to 8497.18, the Standard & Poor's 500 sank 1.26 points, or 0.14%, to 910.71 and the Nasdaq Composite picked up 11.88 points, or 0.66%, to 1808.06. The consumer-friendly FOX 50 fell 1.90 points, or 0.28%, to 673.49.

The mixed finish for Wall Street comes as the bears appear to have regained some control of the markets amid concerns stocks have risen too far, too soon.

“After the two days of weakness, the sentiment shift is pretty palatable. The tone has turned bearish. There’s no doubt about it. In the last few days it’s sort of reared it’s ugly head,” said Frank Davis, director of sales and trading at LEK Securities.

Aside from the volatile price of crude oil, the markets lacked much direction on Wednesday. Wall Street had a muted response to another tame inflation report, disappointing guidance from FedEx (FDX) and the unveiling of the White House’s regulatory overhaul.

“I would say this market the entire week has been driven by oil prices,” said Art Hogan, chief market strategist at Jefferies & Co. “I don’t think we’ve reached that magic point of commodity prices affecting consumer spending yet. But at some point in time, we’ll say it’s seriously become a drag on spending.” 

The bulls have taken a back seat this week as the Dow has tumbled nearly 300 points in a pair of selloffs -- the worst two-day slide since March 30. The losses haven’t been sparked by any new groundbreaking developments, rather traders have said stocks have run out of momentum after their largest 14-week surge in more than three decades. 

Some have questioned if this is the beginning of the long-awaited correction from recent highs. 

“If the bears are happy with being down 4% in three days after being up 40% in three months, god bless them,” said Hogan. “Unfortunately everyone is talking about ‘too far, too fast.’ I would say the more we pull back, the more bullish we’re going to get here because we have all of this money on the sidelines. No one is going to wait for a 15% pullback.”

The Dow was led higher Wednesday by Pfizer (PFE) and Home Depot (HD). The index's biggest percentage losers included General Electric (GE) and Alcoa (AA). 

Thanks to solid gains for tech stocks like Adobe (ADBE) and a rally in the bio-tech sector, the Nasdaq Composite closed solidly higher, its first gains since Friday. 

Crude's $2 rally off the lows Wednesday wasn't enough to carry the Dow to a positive finish. Still, energy stocks pared their losses as crude avoided extending its three-day slump by settling at $71.03 per barrel, up 56 cents, or 0.79%. The rally came in the face of a new government report that revealed an unexpected surge in gasoline inventories. 

Financial stocks were the biggest drags on the markets after Standard & Poor's cut its credit ratings on a slew of banks, including Wells Fargo (WFC), U.S. Bancorp (USB), Key Corp. (KEY) and Fifth Third Bancorp (FITB). The ratings company warned of increased risks due to a transition period for the industry. 

The selloff came even as several major banks officially repaid their bailout cash on Wednesday, including JPMorgan Chase (JPM), Morgan Stanley (MS) and BB&T (BBT).

Meanwhile, stocks didn't appear to be fazed by Washington, where President Barack Obama unveiled the most sweeping financial regulatory overhaul since the Great Depression. The administration wants to give vast new powers to the Federal Reserve, make the Office of Thrift Supervision disappear and create a new consumer protection agency. If the markets believe the approach is too heavy-handed, it could prove to be a new headwind for stocks.

Data Dump

Wall Street had a muted reaction to a second-straight inflation report that seemed to indicate inflation isn't a near-term problem for the economy.

The Labor Department said Wednesday consumer prices rose by just 0.1% last month, well shy of the 0.3% increase economists expected. Excluding food and energy, prices rose an in-line 0.1%. However, prices were off by 1.3% from a year ago -- the largest annual decline since April 1950.

Corporate Movers

FedEx (FDX) beat the Street with an adjusted-profit of 64 cents per share but warned there isn’t “enough visibility into the economic recovery and jet fuel prices to provide a meaningful annual earnings forecast.” FedEx sees earnings in the range of 30 cents to 45 cents per share for the current quarter, compared to the Street’s view of 70 cents.

NRG Energy (NRG), Southern Co. (SO), Scana (SCG) and Unistar Nuclear Energy are expected to split $18.5 billion in federal financing to build the next generation of nuclear reactors, The Wall Street Journal reported. It’s believed those four energy companies beat out Exelon (EXC) and Entergy (ETR), two of the industry’s leaders in nuclear energy.

Eddie Bauer (EBHI) filed for Chapter 11 protection and unveiled a deal to be acquired by private-equity firm CCMP Capital Advisors.

Savient Pharmaceuticals (SVNT) surged by more than 30% after an FDA panel recommended greenlighting its experimental gout drug for certain patients. The agency is expected to rule on the arthritis drug Krystexxa by August 1.

Star Scientific (STSI) lost almost three-quarters of its market cap after the tobacco company lost a patent suit with Reynolds American (RAI). Star had sought several hundred million dollars in damages after saying Reynolds used Star’s new method to lower cancer-causing toxins in tobacco.

Adobe (ADBE) reported an in-line adjusted-profit of 35 cents per share and a slightly better-than-expected revenue forecast for the current quarter. However, the maker of Photoshop software said its profit margin fell 3% to its worst level in three years.

E*Trade Financial (ETFC) tumbled 11.5% after the online brokerage unveiled plans to sell common stock and exchange debt in an effort to raise $1.2 billion. The moves could dilute current shareholders by 40%.

Netflix (NFLX) rose sharply after the DVD rental service was upgraded to “buy” from “hold” by Wedbush Morgan on valuation, the fourth upgrade for the company since March.

Global Markets

London's FTSE 100 fell 1.16% to 4278.46, France's CAC 40 fell 1.64% to 3161.14 and Germany's DAX sank 1.86% to 4799.98. 

In Asia, Japan's Nikkei 225 gained 0.9% to 9840.85, Hong Kong's Hang Seng tumbled 0.45% to 18084.60 and China's Shanghai Composite jumped 1.23% to 2810.12.