Stocks fluctuated Wednesday as investors contended with renewed concerns about the financial sector and a rise in oil prices but found some solace in an upbeat profit report from Hewlett-Packard Co.

Worries about the well-being of mortgage financiers Fannie Mae and Freddie Mac again dragged on the financial sector. Wall Street is nervous that the government-chartered companies will need an injection of cash from the Treasury Department, a move that could wipe out shareholders' equity.

But stocks pulled off their lows after Fannie Mae Chief Executive Daniel Mudd said the concerns about the company's financial position are overblown.

"They haven't offered anything and we haven't asked for anything," Mudd said, referring to the federal government in a public radio interview Wednesday morning. "I don't anticipate that they will do that."

Fannie Mae and Freddie Mac shares pulled off their lows but were still each down more than 15 percent.

In midmorning trading, the Dow Jones industrial average rose 42.34, or 0.37 percent, to 11,390.89. Concerns about inflation and the financial sector led the Dow to post its worst two-day performance since late June on Monday and Tuesday with an overall drop of about 310 points.

Broader stock indicators also advanced Wednesday. The Standard & Poor's 500 index advanced 5.09, or 0.40 percent, to 1,271.78, while the Nasdaq composite index rose 13.09, or 0.55 percent, to 2,397.45.

But oil, which has rebounded this week after dropping $35 from its July 11 high of $147.27, continued its rise of the past few days. Government reports last week and on Tuesday showed larger-than-expected increases in inflation faced by consumers and companies, raising further concern about the effect of elevated oil prices.

Light, sweet crude rose 97 cents to $115.50 per barrel on the New York Mercantile Exchange after the Energy Department said crude oil inventories rose much more than forecast last week, but gasoline inventories shrank by more than expected.

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