US stocks closed little changed on Tuesday after the International Monetary Fund reduced its growth forecasts for 2015 and 2016, increasing speculation central banks would take more aggressive policy moves to spark economic improvement.
The lower forecasts implied less demand for fuel through 2016, contributing to another fall in crude oil, although some bullish results from major energy companies kept the sector afloat. The S&P energy index .SPNY eked out a gain of 0.09 percent.
The IMF cut its forecasts for both years by 0.3 percentage points and advised advanced economies to maintain accommodative monetary policies to avoid increases in real interest rates as cheaper oil increases deflation risk.
The European Central Bank is expected to announce a bond buying program on Thursday to boost the region’s flagging economy.
“Any sense at all that the ECB disappoints, you will see the markets correct rather harshly,” said Ken Polcari, Director of the NYSE floor division at O’Neil Securities in New York.
“You can speculate all you want and investors can take the market higher all they want, but until the ECB comes out and says it, you are not really going to know.”
The Dow Jones industrial average rose 3.66 points, or 0.02 percent, to 17,515.23, the S&P 500 gained 3.12 points, or 0.15 percent, to 2,022.54 and the Nasdaq Composite added 20.46 points, or 0.44 percent, to 4,654.85.
U.S. crude CLc1 settled down 4.7 percent to USD 46.39 per barrel, after hitting an intraday low of USD 45.89, while Brent LCOc1 settled down 1.8 percent at USD 47.99.
Halliburton Co and Baker Hughes Inc (BHI.N) warned that a fall in drilling activity would hurt 2015 results, though the companies also reported better-than-expected fourth-quarter profits. Halliburton rose 1.8 percent to USD 39.83 while Baker gained 1.2 percent to USD 57.26.
Johnson & Johnson fell 2.6 percent to USD 101.29 as the biggest drag on both the Dow and S&P 500 after adjusted earnings beat expectations but revenue missed forecasts.
Morgan Stanley reported a drop of 81 percent in revenue from trading fixed-income securities, currencies and commodities, though earnings rose on a sharp drop in legal costs. Shares dipped 0.4 percent to USD 34.75.
FXCM Inc plummeted 87.3 percent to USD 1.60 on volume of over 91 million shares, its most active day ever. The retail foreign exchange laid out details of a rescue loan after USD 200 million of losses on last week’s shock removal of the cap on the Swiss franc.
After the closing bell, Netflix shares surged 12.1 percent to USD 391 after posting a quarterly revenue increase of 26.3 percent, while IBM lost 1.6 percent to USD 154.51 after its results.
NYSE declining issues outnumbered advancers 1,894 to 1,207, for a 1.57-to-1 ratio; on the Nasdaq, 1,639 issues fell and 1,128 advanced, for a 1.45-to-1 ratio favoring decliners.
The S&P 500 posted 47 new 52-week highs and 17 new lows; the Nasdaq Composite recorded 70 new highs and 109 lows.
Volume was moderate, with about 7.2 billion shares traded on US exchanges, roughly in line with the 7.29 billion average so far this month, according to BATS Global Markets.