Dow Slips, Nasdaq Ticks Up

Updated from 3:46 p.m. EDT

Financial stocks fell, and the major indices in New York closed mixed Wednesday as some banks were downgraded, others paid back TARP money and all might be subject to a new regulatory system.

The Dow Jones Industrial Average was down 7.5 points, or 0.09% at 8497.18, and the S&P 500 lost 1.26 points, or 0.1%, to 910.71. The Nasdaq, however, was higher by 11.88 points, or 0.7%, at 1808.06.

Wednesday's session followed the biggest two-day point drop in the Dow Jones Industrial Average since March 30, which equated to a 3.4% haircut.

"I think you've seen there's more people that are sensing things have gone too far too fast, and some people have taken some chips off the table the last few days," says Michael James, managing director at Wedbush Morgan Securities. "The burden of proof right now is on the bulls. We've been in an uptrending range, and every move down towards the lower end of that range has been a buying opportunity -- we won't know for a week or so whether this is similar."

Consumer stocks were on the rise, while industrials, financials and energy stocks underperformed. Home Depot(HD Quote) and Pfizer(PFE Quote) were the best performers on the Dow, gaining 1.9% and 3%, respectively. Alcoa(AA Quote) and General Electric(GE Quote) were the biggest percentage losers on the index, shedding 3.8% and 4.2%, respectively.

Financials were in focus as some banks suffered a downgrade, others paid back TARP money, and Wall Street sifted through reports on the Obama administration's proposal for significant changes to the financial regulatory system.