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By Reuters and Evelyn Cheng, CNBC

U.S. stocks closed mixed Tuesday, stabilizing after a sharply lower start to the year despite pressure from a fresh decline in oil prices.

The major averages ended well off session highs but the Dow Jones industrial average and Standard & Poor's 500 recovered from an intraday dip to finish in positive territory, up 27.94 points, or 0.17 percent, and 1 point, or 0.05 percent, respectively.

The Nasdaq Composite ended the day down 11.47 points, or 0.26 percent.

The relatively flat outcome was a welcome relief from the sharp selloffs that dominated the first two trading weeks of 2016 -- the worst start to a year in the history of the Dow and the S&P 500.

After trading in positive territory into early afternoon, inspired by raised hopes for more stimulus measures in China and positive earnings reports in the United States, all three major indices turned negative in midafternoon before recovering late.

The markets initially shrugged off data showing that China's annual growth rate was the slowest in 25 years, focusing instead on hopes of further stimulus measures from Beijing, and on strong earnings reports from Bank of America and Morgan Stanley.

But as the price of benchmark U.S. crude oil renewed its slide, sentiment turned bearish. West Texas Intermediate settled down 96 cents, at $28.46 a barrel in New York. Earlier, Brent crude, a benchmark for international oils, rose 62 cents, or 2.2 percent, to $29.17 a barrel in London.

China's 2015 growth hit 6.9 percent after the fourth quarter slowed to 6.8 percent, capping a tumultuous year in which concerns about Beijing ability to rebalance the slowing economy have rattled investors across markets.

Global recession fears mount amid market turbulence

"By no means is this indicative of the worst is over," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey. "We've had a very erratic, choppy start to the year and the China news is going to give investors a reason to do some short covering and something to hang their hats on."

Wall Street is coming off a massive selloff on Friday that saw the S&P 500 sinking to its lowest since October 2014.

Bank of America rose 2 percent to $14.75 and Morgan Stanley jumped 3.9 percent to $26.95 after the Wall Street banks reported better-than-expected quarterly profits.

The results also boosted Goldman Sachs, JPMorgan , Citigroup and Wells Fargo in early trading.

Investors will scrutinize corporate earnings reports for a bearing on the impact of the global slowdown on results. S&P 500 companies are expected to report a 4.7 percent drop in quarterly profit, according to Thomson Reuters data.

IBM and Netflix are scheduled to report results after the close.