Stocks turned mixed as oil prices steadied, and as the S&P 500 marked the beginning of a two-year bull market.
The Dow Jones Industrial Average struggled for direction throughout the session, and was up more than 30 points by noon. The blue-chip index rose sharply on Tuesday.
Among Dow components, IBM and Merck rose, while DuPontand Chevronfell.
The S&P 500 and the tech-heavy Nasdaq declined. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose to nearly 20.
Among key S&P 500 sectors, materials and energy fell, while utilities and telecom rose.
Stocks appeared to be tracking oil prices, holding steady after OPEC said it saw no reason to hold an emergency meeting to discuss raising output, but rising after oil prices rose after a report that black smoke was rising from an oil terminalin Libya.
London Brent crude rose more than 2 percent, above $115 a barrel, while U.S. light sweet crude rose slightly, above $105. Gold rose above $1,434, falling from the previous day's record high.
Crude oil inventories in the U.S. rose 2.5 million barrels, more than expected, while gasoline inventories fell by 5.5 million barrels, more than expected, the U.S. Energy Information Administration said Wednesday.
"Everything is about oil, it really comes down to that," says Randy Frederick, director of trading and derivatives at Charles Schwab.
The VIX is a good barometer of the market's unease as it has moved from trading around 15 or 16 to a new "comfort zone" of 19 or 20, Frederick said.
"What (the VIX) is telling us now is there is a higher level of anxiety or uncertainty in the market now than there was," he said. But, he added, "that's not a bad thing for a market that's been going straight up for six months.
"If oil prices spike to $150 to $200 a barrel, and are sustained, that will derail the recovery," he said. "But these small spikes are really more opportunities than anything else."
The S&P 500 has risen 95.4 percent since it bottomed at 676.53 on March 9, 2009 after hitting a peak of 1,565.15 on Oct. 9, 2007. The rally in the broad market index is its best in 55 years. Some stocks have done particularly well, including Genworth Financial , up 1329.7 percent, and JDS Uniphase , up 1,048.4 percent.
The Saudi stock market got a lift from billionaire Prince Alwaleed bin Talalwho said he would invest invest 1 billion riyals ($267 million). The Saudi stock market has been battered by unrest in the Middle East.
In stocks news, tech shares could weigh on Wednesday's market after fiber optic component maker tumbled more than 30 percent following a disappointing forecast.
That news hit other companies in the sector, including JDS Uniphase.
Texas Instruments also slumped after it narrowed its guidance and said that demand for chips for televisions remains weak, although UBS raised its price target for the chip maker to $36 a share from $32.
Honeywell slipped despite issuing an improved forecast for first-quarter sales and profit. The diversified manufacturer reaffirmed its outlook for 2011, and said it authorized a $3 billion stock buyback.
Children's Place soared despite a 5.8 percent decline in fourth-quarter profits, as better margins and lower expenses kept losses in check.
Shares of Dynegy skidded after news the power company may declare bankruptcy if it can't replace or amend a loan agreement.
Johnson Controls, meanwhile, gained after Barclays raised its rating on the diversified manufacturer to "overweight" from "equalweight," saying the company's building efficiency unit should benefit from rising prices.
HCA plans to go public Wednesday, with analysts expecting strong demand. The IPO could raise up to $3.7 billion.
In U.S. economic news, the Mortgage Bankers Association's seasonally adjustedindex of mortgage application activity rose 15.5 percent in the week ended March 4, the highest level in three months.
And U.S. wholesale inventories rose 1.1 percentin January to $436.88 billion, the highest level in 14 months, according to the Commerce Department. Economists surveyed by Reuters had expected a 0.9 percent increase.
The Treasury will auction $21 billion in reopened 10 year notes at 1 p.m.
Galleon Group founder Raj Rajaratnam goes on trial Wednesdayin a closely-watched Wall Street insider trading criminal case
Sovereign debt worries continued to weigh on the market in Europe days after Moody's cut its rating on Greece's debt by three notches, and ahead of a meeting of euro zone heads of state Friday.
On the Calendar:
WEDNESDAY: 10-year Treasury note auction; Earnings after-the-bell from H&R Block.
THURSDAY: BoE announcement, international trade, jobless claims, quarterly services survey, 30-year Treasury bond auction, Treasury budget, money supply, Nasdaq peak anniversary; Earnings before-the-bell from Smithfield Foods and after-the-bell from National Semiconductor.
FRIDAY: Retail sales, consumer sentiment, business inventories, S&P index rebalancing info due, Apple's iPad 2 ships; earnings before-the-bell from Ann Taylor.
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