Stocks manage slim gains
Wall Street closes off session highs as relief about mild inflation report peters out.
NEW YORK (CNNMoney.com) -- Stocks gained Wednesday after a milder-than-expected inflation report and falling oil prices helped dampen worries about inflation. But a late-session technology selloff caused Wall Street to give up bigger gains.
The Dow Jones industrial average (INDU) rose 0.5%. The broader Standard & Poor's 500 (SPX) index added 0.4%. The Nasdaq composite (COMP) ended just above unchanged.
Stocks slipped Tuesday, continuing last week's retreat, as investors eyed record oil prices and a lackluster profit outlook from Wal-Mart Stores (WMT, Fortune 500). But stocks rallied through most of Wednesday, with the inflation report giving investors an incentive to scoop up recently-battered shares.
The advance throughout the session Wednesday was mostly a relief rally after several down sessions, and not something more substantial, said Dean Barber, president at Barber Financial Group.
He said that the inflation report was not really reflective of the pricing pressures that are currently hitting consumers.
"It's hard for me to believe the April numbers, the way commodity prices have been rising," Barber said.
Thursday brings the weekly jobless claims report, readings on manufacturing in the New York and Philadelphia areas, and earnings from JC Penney (JCP, Fortune 500).
Consumer Price Index: The CPI rose 0.2% in April, versus forecasts for a rise of 0.3%. Stripping out food and auto sales, CPI rose 0.1%, versus expectations for a rise of 0.2%. Food prices played a big role in the rise in prices, posting the biggest jump in 18 years. (Full story.)
Company news: Freddie Mac (FRE, Fortune 500) posted a steep quarterly loss that was nonetheless narrower than expected. The government-sponsored mortgage lender also said it would raise about $5.5 billion in new capital. Freddie shares jumped 9%.
Macy's (M, Fortune 500) reported a quarterly loss on weaker revenue versus a year ago, due to softer sales and consolidation costs. However, results topped analysts' forecasts. Shares gained 4.5%.
Among other movers, Hewlett-Packard (HPQ, Fortune 500) bounced more than 4% after getting knocked back Tuesday on news that it is buying Electronic Data Systems (EDS, Fortune 500) for $13.9 billion in cash.
Fellow Dow components AT&T (T, Fortune 500) and Verizon Communications (VZ, Fortune 500) led the list of telecom shares rising.
On the downside, Deere & Co. (DE, Fortune 500) slipped almost 10% in active trading, after the farm and construction machinery company warned that higher material costs will likely cut into its earnings through the rest of the year.
Whole Foods Market (WFMI, Fortune 500) slumped 14% after the retailer's first-quarter profit fell from a year ago and missed estimates.
Market breadth was positive. On the New York Stock Exchange, winners topped losers 3 to 2 on volume of 1.19 billion shares. On the Nasdaq, advancers and decliners were narrowly mixed on volume of 2.13 billion shares.
Commodities: U.S. light crude oil for June delivery fell $1.58 to settle at $124.22 on the New York Mercantile Exchange, despite a weaker-than-expected weekly inventories report. On Tuesday, crude hit a record trading high of $126.98 a barrel during the session.
The national average price for a gallon of regular unleaded gas rose to a record $3.758 from $3.732 the previous day, according to AAA. It was the seventh record in a row.
COMEX gold for August delivery fell $2.90 to $871 an ounce.
Other markets: The dollar firmed up a bit versus the euro and the yen. (Full story.)
Treasury prices rose, lowering the yield to 3.90% from 3.92% late Tuesday. Bond prices and yields move in opposite directions. 
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