Wall Street shed some of its early gains on Tuesday as U.S. crude prices fell, cutting short a rally inspired by raised hopes for more stimulus measures in China and earnings reports in the United States.
China's growth in 2015 was the slowest in 25 years, in line with expectations, as rattled investors continue to worry about Beijing's ability to manage the economy.
The slowdown in China has resulted in a rout in commodity prices, with oil sliding below 12-year lows.
Oil prices diverged on Tuesday – Brent was up, while U.S. crude was down, pulling down energy and materials stocks.
The market is being led by a combination of earnings reports and technical factors, said Jeff Powell, managing partner of Polaris Greystone Financial Group in California.
"From a technical perspective, we are at a level which if we don't hold, we're in big trouble and even decent earnings are probably going to be overlooked," Powell said.
The S&P 500 has fallen about 12 percent from its high in May, pushing it into what is generally considered "correction territory." On Friday, it sank to its lowest since October 2014.
At 12:38 p.m. ET (1738 GMT), the Dow Jones industrial average was up 73.79 points, or 0.46 percent, at 16,061.87, the S&P 500 was up 7.1 points, or 0.38 percent, at 1,887.43 and the Nasdaq Composite index was up 7.16 points, or 0.16 percent, at 4,495.58.
Bank of America reversed course to trade down 2.8 percent at $14.05 despite beating fourth-quarter profit expectations, after it expressed concerns about weak oil prices.
Morgan Stanley barely held on to its gains, up 0.8 percent at $26.19, after reporting better-than-expected profit.
UnitedHealth was up 2.9 percent at $112.47, giving the biggest boost to the Dow, after the health insurer reported a 30 percent rise in quarterly revenue.
Macy's was up 4 percent at $39.35 after David Einhorn's Greenlight Capital reported a stake in the department store operator.
Tiffany was down 4.1 percent at $64.89 after the upscale jeweler said holiday season sales fell 6 percent.
IBM and Netflix are scheduled to report results after the close.
Declining issues outnumbered advancing ones on the NYSE by 1,711 to 1,303. On the Nasdaq, 1,612 issues fell and 1,153 rose.
The S&P 500 index showed one new 52-week high and 37 new lows, while the Nasdaq recorded four new highs and 206 new lows.
(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Savio D'Souza and Saumyadeb Chakrabarty)
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Updated Date: Jan 20, 2016 01:00 AM