NEW YORK (AP) -- U.S. stock indexes spent Wednesday drifting and finished with small gains. While big companies continue to report strong profit growth, investors aren't sure how much longer it will last.
The S&P 500 index rallied 0.8 percent in the morning after fourth-quarter earnings from major companies including IBM, consumer products maker Proctor & Gamble, and manufacturer United Technologies. Later, traders focused on some less encouraging quarterly reports and the muddled state of trade talks between the U.S. and China, and the S&P 500 lost 0.8 percent before it gradually turned higher.
Corporate profit growth shot higher in early 2018 after the Republican-backed corporate tax cut, but Liz Ann Sonders, chief investment strategist for Charles Schwab, said corporate profits are now growing at a slower clip because of economic weakness in Europe and China and a steep decline in oil prices.
"Even if we end up with the best case scenario on trade, it doesn't alleviate... global growth slowing, earnings uncertainty with regard or 2019, (or) monetary policy," she said.
Smaller companies lagged Wednesday, and most of the companies listed on the New York Stock Exchange finished with losses. Energy companies fared the worst as the price of crude oil fell for the third time in four days after a strong start to 2019.
The S&P 500 added 5.80 points, or 0.2 percent, to 2,638.70 after a 1.4 percent loss Tuesday. The Dow Jones Industrial Average climbed 171.14 points, or 0.7 percent, to 24,575.62.
The Nasdaq composite edged up 5.41 points, or 0.1 percent, to 7,025.77. The Russell 2000 index of smaller-company stocks dipped 3.20 points, or 0.2 percent, to 1,454.26.
IBM rocketed 8.5 percent to $132.89 after its fourth-quarter results surpassed Wall Street estimates. Investors were also pleased with the company's forecasts for 2019. BMO Research analyst Keith Bachman said critical operations including IBM's business and technology services divisions did well in the quarter. IBM stock sank 25 percent in 2018.
Tide, Bounty and Crest maker Procter & Gamble rallied 4.9 percent to $94.84 after its profit came out ahead of expectations and its sales were well above analyst forecasts as well. The company said its annual profit and sales could be slightly stronger than it previously expected.
Elevator and jet engine maker United Technologies staged its biggest rally in almost a decade, rising 5.1 percent to $116.67 following its quarterly report. Media company Comcast jumped 5.5 percent, its biggest gain in almost three years, after it picked up more internet subscribers and got a revenue boost from Sky, its big bet on European TV. The stock closed at $36.89.
The corporate tax cut might aid U.S. company profits on a permanent basis, but as investors compared 2018 to the year before, the tax cut caused a big one-time increase in profit growth. Investors have always known that boost wouldn't be repeated in 2019, and in recent months they've become more pessimistic, wondering if growth will slow down dramatically or if profits might even start shrinking in the months ahead.
Sonders, of Charles Schwab, added that consumer confidence has been slipping, and the partial shutdown of the federal government, which has lasted a month, could make matters worse. She said numerous companies that perform contract work for the government might have to start laying off workers soon.
Federal employees will miss their second consecutive paycheck Friday unless there is a deal to end the shutdown before then.
Stocks had slumped Tuesday as investors reacted to signs of slower global economic growth, including a weakened forecast from the International Monetary Fund. They also worried about possible trouble in trade talks between the U.S. and China.
White House economic adviser Larry Kudlow denied media reports saying the U.S. had turned down an offer by Chinese trade officials to meet this week, due to a lack of progress on issues such as protection of intellectual property. Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer are scheduled to meet next week.
"It's frustrating for investors who are trying to get a sense of what's happening when you have members of the administration often contradicting each other," said Sonders.
Other corporate reports were less encouraging. Abbott Laboratories, which makes Ensure and Pedialyte nutritional shakes, heart devices and medications, fell 2.2 percent to $69.91 after its revenue disappointed investors. Credit card issuer Capital One shed 6.2 percent to $78.20 after its profit and revenue both fell short of expectations.
Bond prices dipped. The yield on the 10-year Treasury note rose to 2.74 percent from 2.73 percent.
U.S. crude oil lost 0.7 percent to $52.62 per barrel in New York. Brent crude, used to price international oils, fell 0.6 percent to $61.14 per barrel in London.
The British FTSE 100 gave up 0.8 percent. France's CAC 40 slipped 0.1 percent and the German DAX shed 0.2 percent. Britain's FTSE 100 lost 0.5 percent.
Japan's Nikkei 225 index shed 0.1 percent. South Korea's Kospi rose 0.5 percent and Hong Kong's Hang Seng was almost flat.
In other commodities trading, wholesale gasoline slipped 1.1 percent to $1.39 a gallon and heating oil fell 0.7 percent to $1.89 a gallon. Natural gas shed 2 percent to $2.98 per 1,000 cubic feet. Gold was unchanged at $1,284 an ounce and silver rose 0.4 percent to $15.38 an ounce. Copper slipped 0.2 percent to $2.65 a pound.