Stocks stumbled modestly as declines in the more economically sensitive materials and financial sectors offset a rise in oil prices and energy stocks.

The Dow Jones Industrial Average lost 22.86 points, or 0.21%, to 10835.28, while the Standard & Poor's 500 stock index slipped 2.97 points to 1144.73 and the Nasdaq Composite dropped 3.03 points to 2376.56.

With just one day left in the month, all three indexes have posted strong returns, and remain on pace for the best September in decades. The Nasdaq, in particular, is 12.4% higher on the month.

The materials sector was the biggest drag on the market Wednesday, with DuPont, Dow Chemical and Alcoa falling 2.5%, 1.7% and 1.1% respectively, amid the lingering uncertainties.

Financial stocks were also weak as the government made steps towards exiting its investments in Citigroup and American International Group, made during the height of the financial crisis. Shares of Citigroup and AIG pared strong intraday gains to finish 1% and 0.4% higher respectively.

But J.P. Morgan Chase lost 2.2% and Bank of America shed 1.2%. The Dow was able to mount a midday rally after the Department of Energy said crude oil stockpiles fell by 475,000 barrels to 357.9 million barrels, more than an expected 300,000 barrel decline.

The steep drop, which follows a summer of unusually high levels of stockpiling, helped oil prices jump briefly over $78 a barrel after falling as low as $75.60 a barrel earlier in the morning.

Energy stocks benefited from oil's climb, as Sunoco rose 3.4%, Chevron added 0.5% and BP rose 1.8% after incoming Chief Executive Officer Bob Dudley said he would restructure BP's upstream business and create a new safety division, with the power to audit any part of the company' operations. Exxon Mobil finished lower, off 0.8%.

European market

European stocks posted losses Wednesday, with shares of Hennes & Mauritz falling sharply after the Swedish fashion retailer's third quarter earnings disappointed investors.

The Stoxx Europe 600 index slipped 0.5% to 261.02. Trading was choppy, with equities moving in and out of positive territory several times during the session.

Earlier, data showing a September rise in euro-zone economic sentiment failed to boost European equities. In Stockholm, shares of H&M tumbled 6.5%.

The U.K. FTSE 100 index fell 0.2% to 5,569.27, led lower by shares of Vedanta Resources, which dropped 4.3% on news of legal troubles in India.

On the positive side, BP advanced 3.9% after the oil giant announced plans to restructure its upstream business and create a new safety and risk division. In France, the CAC 40 stock index dropped 0.7% to 3,737.12.

Shares of Alcatel Lucent slipped 2.3%, and those of car maker PSA Peugeot Citroen fell 1.6%. Germany's DAX 30 index ended down 0.5% at 6,246.92. Financial stocks headed lower, with Deutsche Bank dropping 2.5% and Commerzbank AG falling 1.1%.

Asian market

Asian stock markets ended mostly higher Wednesday, with shares in Tokyo boosted by a better than expected business sentiment in the Bank of Japan's quarterly tankan survey. Japan's Nikkei Stock Average was up 0.7%, South Korea's Kospi Composite gained 0.6%, Hong Kong's Hang Seng Index rose 1.2% and China's Shanghai Composite ended flat.

Sentiment in the region was also aided by Wall Street's rise Tuesday, as weak U.S. consumer confidence and housing data heightened expectations the Federal Reserve would embark on a fresh round of quantitative easing to recharge a slowing U.S. economy.

In addition, the HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, rose to a five-month high reading of 52.9 in September.

In Tokyo, the market got a leg up from the Bank of Japan's September tankan survey outcome, which showed sentiment among the country's big manufacturers picked up for the sixth consecutive quarter, and at a faster pace than expected.

Companies, however, turned more cautious in their outlook for the coming quarter due to the surging yen and increased uncertainty over the global economy.

Exporters and automakers were broadly higher, with Sony up 2.0% and Canon 1.7% higher, while Nissan Motor gained 2.6%. Shinsei Bank soared 6.9% after it Tuesday raised its net profit outlook for the fiscal year ending March 2013.

Base metals

Base metals closed higher on the London Metal Exchange Wednesday, supported by a weaker U.S. dollar and upbeat Chinese manufacturing data.

LME three month copper outperformed, rising to two year highs and closing up 1.4% on Tuesday's PM kerb close at $8,063 a metric ton. The metals were helped higher after a HSBC survey published Wednesday showed manufacturing in China, the world's top metals consumer, hit a five month high in September.

Copper also found support in news that Vedanta Resources PLC's (VED.LN) Indian operations would have to close a copper smelter owned by its unit Sterlite Industries (India) Ltd. (500900.BY), after a court cited violation of environmental rules. Crude futures rallied to a seven week high Wednesday after a government report showed U.S. oil and fuel inventories dropped. Data from the U.S.

Energy Information Administration showed total oil and fuel supplies climbing down from a 27 year high in the week ended Sept. 24, potentially signaling the beginning of an end to a glut that has put downward pressure on prices throughout 2010.

Light, sweet crude for November delivery settled $1.68, or 2.2%, higher, at $77.86 a barrel on the New York Mercantile Exchange, after briefly trading to $78.09, also a seven week high.

Brent on the ICE futures exchange settled $2.06 higher, at $80.77 a barrel. Oil inventories dropped by 500,000 barrels last week, slightly more than analysts had anticipated in a Dow Jones survey.

Larger drops in gasoline and distillate stocks, a category including heating oil and diesel, surprised analysts who had expected increases. Gold futures settled at a new record above $1,300 for the second-consecutive session as expectations of more U.S. stimulus money boosted the metal as a perceived dollar and inflation hedge.

The most actively traded gold contract, for December delivery, rose $2, or 0.2%, to settle at $1,310.30 a troy ounce on the Comex division of the New York Mercantile Exchange, marking the metal's 10th record settlement in the last 12 sessions. The contract hit a record intraday high of $1,314.80 in electronic activity overnight.