U.S. 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.
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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."
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The Dow Jones industrial average <.DJI> rose 3.66 points, or 0.02 percent, to 17,515.23, the S&P 500 <.SPX> gained 3.12 points, or 0.15 percent, to 2,022.54 and the Nasdaq Composite <.IXIC> added 20.46 points, or 0.44 percent, to 4,654.85.
U.S. crude <CLc1> settled down 4.7 percent to $46.39 per barrel, after hitting an intraday low of $45.89, while Brent <LCOc1> settled down 1.8 percent at $47.99. [O/R]
Halliburton Co <HAL.N> 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 $39.83 while Baker gained 1.2 percent to $57.26.
Johnson & Johnson <JNJ.N> fell 2.6 percent to $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 <MS.N> 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 $34.75.
FXCM Inc <FXCM.N> plummeted 87.3 percent to $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 $200 million of losses on last week's shock removal of the cap on the Swiss franc.
After the closing bell, Netflix <NFLX.O> shares surged 12.1 percent to $391 after posting a quarterly revenue increase of 26.3 percent, while IBM <IBM.N> lost 1.6 percent to $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 U.S. exchanges, roughly in line with the 7.29 billion average so far this month, according to BATS Global Markets.
(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)