U.S. stocks flitted in and out of negative territory as surging financial stocks outweighed declines in the materials sector.

The Dow Jones Industrial Average slipped three points to 11356 in midday trading, while the Standard & Poor's 500 stock index edged up two points to 1225 and the Nasdaq Composite added six points to 2604.

The U.S. dollar also continued its recent run higher, pushing down prices of commodities and hitting the stocks of materials, energy and industrial companies.

Consumer discretionary stocks were also under pressure, weighed by a 2.5% decline at McDonald's.

The fast-food chain led declines among Dow components after reporting same store sales rose 4.8% in November, driven by its McRib sandwich, but fell short of analysts' estimates.

Pulling on the other side were financial stocks, fuelled by gains at smaller regional banks.

Lincoln National jumped 7.5%, Fifth Third Bancorp surged 5.3% and Zions Bancorp added 4.8%.

Regions Financial, Keycorp and PNC Financial Services all gained by between 4.4% and 2.6%.

Morgan Stanley firmed 2.9% after the consortium of investors buying the investment bank's 34.3% stake in China International Capital all won their necessary approvals.

Bank of America surged 3.2% to lead the Dow components, while J.P. Morgan Chase added 2%.

American International Group, however, tumbled 2.7% after The Wall Street Journal reported that the U.S. government is looking to sell at least $15 billion of its shares in the insurer in the first of several stock offerings to investors starting in early 2011.

European Markets

European bourses finished mostly higher Wednesday as insurers and banks rallied, though the German and U.K. markets bucked the positive trend.

The Stoxx Europe 600 index advanced 0.4% to end at 274.98 after a volatile session.

The benchmark closed at its highest level in more than two years Tuesday.

Of the main regional indices France's CAC 40 performed best, rising 0.6% to 3,831.98.

Meanwhile, Germany's DAX 30 fell 0.4% to 6,975.87 and the U.K.'s FTSE 100 edged 0.2% lower to 5,794.53.

Peripheral markets had a slow start but turned solidly higher as investors breathed a collective sigh of relief after Ireland's EUR6 billion austerity budget cleared its first hurdle in parliament late Tuesday.

There will be several more budget votes in Ireland in coming days as the government seeks to reduce the nation's soaring deficit.

Dublin's ISEQ index rose 1%, Spain's IBEX 35 climbed 1.6% and Italy's FTSE MIB gained 1.4%.

Greece's ASE Composite declined 0.7%, however, amid a public transport strike in Athens.

Wednesday's session, as many of the past few weeks, was volatile as investors weighed a recent string of solid economic data suggesting the economic recovery is on track against the risk that sovereign-debt contagion may spread further in Europe.

Shares of UniCredit, which has wide exposure to peripheral markets, rose 2.4% in Milan and Banco Popolare surged 9.2%.

In Paris, Societe Generale SA advanced 3% and BNP Paribas SA gained 2.7%. Insurers also rallied. Axa SA climbed 3.1% and Allianz SE rose 2.2%.

Asian Markets

Asian stocks ended mixed Wednesday, with Chinese and Hong Kong shares falling after Beijing advanced the release of monthly inflation data, while a weaker yen boosted Japanese exporters.

The Nikkei Stock Average climbed 0.9% to 10,232.33, its highest finish since June 21, while Hong Kong's Hang Seng Index shed 1.4% and China's Shanghai Composite lost 1.0%.

South Korea's Kospi lost 0.4%. Shares in Hong Kong and China lost ground after the National Bureau of Statistics said it would release Chinese monthly data, including consumer price index figures, Saturday instead of Monday.

An official at the bureau's news department said the bureau aims to issue monthly data around the 11th of each month.

Around the region, many resources plays lost ground, with gold miners leading the decline in China as gold futures fell on profit taking after rising to a record high overnight in New York. Zijin Mining's Hong Kong shares fell 1.8% and its Shanghai ones lost 3.2%.

In Tokyo, shares rallied as exporters benefited from a slipping yen, while the broader market also drew support from a preliminary agreement in the U.S. to extend Bush era tax cuts.

Kyocera added 1.4% and Honda Motor tacked on 2.0%.

Base Metals

Base metals closed mostly higher on the London Metal Exchange Wednesday after improving demand prospects stemmed the impact of a firmer U.S. dollar.

LME three month copper closed the day up 1.5%, at $9,014 a metric ton.

The outlook for the metals has been generally improving in recent weeks amid a spate of more positive economic figures from around the globe.

New data out of Germany Wednesday added further to the increasingly upbeat sentiment as its Economics Ministry reported industrial production rose a seasonally adjusted 2.9% in October from September, and by 11.7% on the year.

Economists surveyed by Dow Jones Newswires had expected industrial output to rise just 0.8% on the month.

The announcement that ETF Securities' new copper, nickel and tin exchange traded commodities will begin trading Friday had also been bullish for prices, analysts said, as were stronger equities.

Oil prices tumbled Wednesday following a government report that showed a sharp increase in U.S. fuel inventories.

Light, sweet crude for January delivery settled 41 cents lower at $88.28 a barrel on the New York Mercantile Exchange.

The Department of Energy reported a bigger than expected rise in stockpiles of gasoline and distillates.

Gasoline inventories jumped by 3.8 million barrels during the week ended Dec. 3. Distillate stocks rose 2.2 million barrels.

Traders appeared to shrug off a decline in crude inventories, focusing instead on products.

Crude stocks fell 3.8 million barrels last week, the DOE said, typically a bullish sign for oil prices.

Refinery use rose 4.9 percentage points to 87.5%.

Investors cashed in on record gold prices as they mulled the longer term inflation and interest rate implications of extended U.S. tax cuts.

The most actively traded gold contract fell $25.80, or 1.8%, to settle at $1,383.20 a troy ounce on the Comex division of the New York Mercantile Exchange.