Stocks creep higher

NEW YORK (CNNMoney.com) -- Stocks rose Wednesday morning, after a choppy start to the session, as worries about a potential credit crisis and the subprime mortgage market vied with upbeat economic news, including a tame reading on core inflation.

The Dow Jones industrial average (up 51.30 to 13,080.22, Charts) gained 0.2 percent, recovering after briefly falling below 13,000 for the first time since April 25, while the broader S&P 500 (up 9.27 to 1,435.81, Charts) index gained 0.5 percent. The tech-fueled Nasdaq Composite (up 14.05 to 2,513.17, Charts) index added 0.4 percent.

Stocks slumped Tuesday on fresh worries about the mortgage and credit markets and disappointing profit forecasts from retailers Home Depot and Wal-Mart Stores.

Stocks opened lower Wednesday, but quickly moved into seesaw mode, as investors scrambled to process the session's competing influences.

On the upside: the July consumer price index (CPI) rose modestly, as expected, in terms of both overall and core inflation; the NY Empire State index, a regional manufacturing report, was stronger than expected; industrial production and capacity utilization both increased in July; and net foreign purchases jumped.

On the downside: oil prices jumped; Applied Materials' revenue forecast disappointed; and financial stocks remained vulnerable to the worries about the credit and mortgage markets.

In other news, an industry report showed that the price of a typical home in the United States continues to drop, but at a slower pace than recently.

Countrywide Financial (up $0.01 to $24.47, Charts, Fortune 500), the leading U.S. mortgage lender, slipped 7 percent Wednesday after Merrill Lynch downgraded it to "sell" from "buy" on worries about the mortgage market, Briefing.com reported. On Tuesday, the company said that foreclosures and delinquencies rose in July to their highest level in several years.

Applied Materials (down $0.71 to $20.53, Charts, Fortune 500) slipped 4 percent after the chip gear maker said late Tuesday that current-quarter orders and revenue would fall from the last quarter. That overshadowed the company's otherwise upbeat quarterly sales and earnings report.

Blue-chip advancers were pretty broad based, with 25 out of 30 Dow stocks rising, led by the financial and consumer stocks that had been hit the hardest in the last few sessions. Citigroup (up $0.52 to $46.18, Charts, Fortune 500), JP Morgan (up $0.95 to $44.25, Charts, Fortune 500) and Home Depot (up $0.78 to $34.30, Charts, Fortune 500) were the biggest gainers.

Market breadth was positive. On the New York Stock Exchange, winners beat losers by a narrow margin on volume of 460 million shares. On the Nasdaq, advancers topped decliners 8 to 5 on volume of 590 million shares.

Treasury prices were little changed, with the benchmark 10-year note yield at 4.72 percent.

In currency trading, the dollar rose versus the euro and fell versus the yen.

U.S. light crude oil for September delivery rose 95 cents to $73.33 a barrel on the New York Mercantile Exchange following the weaker-than-expected weekly oil inventories report.

COMEX gold for December delivery fell $3.60 to $676.10 an ounce.