U.S. stock benchmarks closed higher Tuesday after a seesaw session, as investors looked past the continued drop in oil prices to focus on a meeting of the European Central Bank later this week.
The Dow Jones Industrial Average tacked on 3.66 points, or less than 0.1%, to 17515.23. The S&P 500 gained 3.13 points, or 0.2%, to 2022.55, and the Nasdaq Composite Index climbed 20.46 points, or 0.4%, to 4654.85.
Stocks swung throughout the day, opening with broad gains, turning lower, and then drifting higher again before the close of trading. Traders said that investors were holding back from making aggressive bets until the ECB meeting Thursday, as they expect the central bank will unveil a large-scale bond-buying program aimed at reviving Europe's economy.
"If you're sitting on a pile of money right now, you're probably going to wait until Thursday" before making large new investments, said Michael Antonelli, sales trader at Robert W. Baird. "There's no conviction right now."
A 2.6% drop in Johnson & Johnson shares weighed on the Dow, which lagged behind other major benchmarks. The company reported fourth-quarter sales that fell short of Wall Street forecasts, dented by a stronger dollar.
Investors are watching fourth-quarter earnings reports to determine the implications of a stronger dollar, falling oil prices and sluggish international demand. Jerry Braakman, chief investment officer of First American Trust, frets that an economic slowdown abroad could weigh on corporate-profit growth and risk appetite in the U.S.
"These international concerns are going to test our faith in the global financial framework," said Mr. Braakman, whose firm manages about $ 1.1 billion. "How insulated are we? We're looking through earnings to see if that can give us any guidance." Mr. Braakman is considering taking a more defensive stance on U.S. stocks, but is waiting for more earnings reports to decide.
Oil prices continued to fall Tuesday, which contributed to stocks' early-session declines. Crude-oil prices fell 4.7% to $ 46.39 a barrel. Investors say the monthslong decline raises worries about demand, since it comes alongside slowing growth in Asia and economic troubles in Europe.
While lower oil prices are expected to help some consumer-focused shares, stocks of retailers fell. The consumer-discretionary sector had the steepest declines in the S&P 500, falling 0.6%. Express Inc. slid 13% after it said it had ended buyout talks with Sycamore Partners, which couldn't find appropriate financing for a deal.
"There's an overall concern about the consumer, in spite of lower oil," said Ian Winer, head of equities trading at Wedbush Securities. "The fact [Express] couldn't find financing was a little bit unnerving."
Still, the sector's earnings have been better than expected so far. While only eight companies had reported quarterly results by early Tuesday, seven of them had exceeded Wall Street's earnings forecasts, according to FactSet.
With 49 companies reporting, the S&P 500 is on pace to report 0.4% of fourth-quarter earnings growth from last year, according to FactSet. It is on track to report sales growth of 0.8%. That falls short of analyst estimates for 1.1% of earnings and sales growth, which would be the slowest pace since the third quarter of 2012.
European stocks gained broadly ahead of the ECB meeting. French President François Hollande said Monday he expected the ECB to announce that it will buy government bonds. The Stoxx Europe 600 gained 0.8%. France's CAC 40 rallied 1.2%, and Germany's DAX edged up 0.1% to a record high. Government bonds in many European countries hovered near record-high prices.
Shares of currency brokerage FXCM Inc. tumbled 87%. FXCM said Friday it would receive a $ 300 million rescue package from Jefferies Group LLC, owned by Leucadia National Corp. , after losses from its customers' bets on the Swiss franc left it $ 225 million in the red. Markets were roiled late last week by the Swiss National Bank 's unexpected decision to allow the Swiss franc to rise against the euro.
In economic news, data showed that China's economic growth slowed to 7.4% in 2014, falling to a level not seen in a quarter century.
Still, China's Shanghai Composite Index rallied 1.8%, amid a recent spate of volatile trading. Hong Kong's Hang Seng Index gained 0.9%, and Japan's Nikkei Stock Average jumped 2%.
Treasury prices rose Tuesday, pushing the yield on the 10-year Treasury to 1.806% from 1.815% Friday. Gold prices rose 1.4% to $ 1294.20 an ounce.
In other earnings news, Halliburton Co. rose 1.8% after the oil-services company beat forecasts for its earnings. Its sales fell slightly short of forecasts from analysts polled by FactSet.
Delta Air Lines Inc. rose 7.3% after it said tumbling gas prices boosted its fourth-quarter results, which beat expectations.
Morgan Stanley fell 0.4% after the bank reported fourth-quarter results that missed analyst estimates.
Write to Alexandra Scaggs at alexandra.scaggs@wsj.com
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