Stocks try to muster momentum

NEW YORK (CNNMoney.com) -- Stocks edged higher Wednesday, just a day after major gauges tumbled over 1 percent, as investors struggled for direction.

The Dow Jones industrial average (down 0.89 to 13,500.81, Charts) climbed about 0.1 percent at the start of the session. Both the broader S&P 500 (up 1.77 to 1,511.89, Charts) and the tech-fueled Nasdaq (up 5.67 to 2,644.83, Charts) rose about 0.1 percent.

Major gauges plunged Tuesday after credit rating agencies Standard & Poor's and Moody's downgraded securities backed by subprime mortgages.

The action taken by the ratings firms raised worries that problems in the subprime mortgage sector, which gives home loans to borrowers with poor credit, could further depress the housing sector.

The news also led to a rally in Treasurys in a flight to quality, sending the yield on the 10-year note down to 5.02 percent late Tuesday. Treasury prices were slightly lower Wednesday, taking the yield on the 10-year note up to 5.03 percent.

The dollar, which fell to a record low against the euro Tuesday on the subprime worries, hit another record low of $1.3784 early Wednesday before rebounding to be little changed versus the euro in early trading, while the greenback was lower against the yen.

Oil prices slipped ahead of the 10:30 a.m. ET weekly report on U.S. fuel inventories. U.S. light crude lost 39 cents to $72.42 a barrel.

But with no major economic reports on tap, Wall Street will have a number of earnings reports to look forward to, after getting some profit warnings Tuesday.

Biotech firm Genentech Inc. (down $0.12 to $74.73, Charts) and fast-food giant Yum Brands Inc. (up $1.03 to $33.98, Charts, Fortune 500) are both set to report quarterly results after the closing bell.

In major corporate news, Gerdau AmeriSteel (down $0.39 to $15.30, Charts), the U.S. unit of Brazilian steelmaker Metalurgica Gerdau, agreed to buy rival Chaparral Steel (up $7.96 to $83.65, Charts) in a cash deal worth $4.2 billion.

Home builder Ryland Group (down $0.32 to $35.99, Charts, Fortune 500) became the latest company in the sector to warn of losses from weakness in demand and prices of new homes and a write down in the value of its land holdings and inventory.

Apparel company Liz Claiborne (up $1.04 to $38.27, Charts, Fortune 500) is expected to announce plans Wednesday to sell 16 of its 36 brands, according to a report in the Wall Street Journal.

Overseas, European stocks tumbled Wednesday, while major Asian markets finished the session lower.