By Stephen Culp
NEW YORK (Reuters) - Wall Street struggled for direction after stumbling out of the starting gate on Wednesday as investor fears over a global economic slowdown dampened the spirit of bargain hunters on the first trading day of the new year.
Consumer discretionary stocks pulled the S&P and the Nasdaq into positive territory, while healthcare companies weighed on the Dow.
Healthcare and so-called defensive sectors, such as real estate and utilities, provided the biggest drag to the S&P 500.
The session got off to a rocky start after separate reports showed a deceleration in factory activity in China and the euro zone, indicating that the ongoing trade dispute between the United States and China was taking a toll on global manufacturing.
As 2019 gets under way and with the worst year for U.S. stocks in a decade in the rear-view mirror, some analysts see a "January effect" attracting investors to the table.
"We had a lousy quarter and the negative returns for the year," Said Bucky Hellwig, senior vice president at BB&T (NYSE:BBT) Wealth Management in Birmingham, Alabama. "However, we could see a more friendly Fed than what we had last year and we could see some movement on the trade talks."
"Stocks are cheap and investors are looking to put money to work in the new year," Hellwig added.
The Dow Jones Industrial Average rose 20.04 points, or 0.09 percent, to 23,347.5, the S&P 500 gained 8.71 points, or 0.35 percent, to 2,515.56 and the Nasdaq Composite added 53.58 points, or 0.81 percent, to 6,688.85.
Of the 11 major sectors in the S&P 500, six were in positive territory.
Energy stocks enjoyed the largest percentage gain in the S&P 500, buoyed by a 1.7-percent jump in crude prices. The group was the worst performing S&P sector in 2018.
Banks got a boost from Barclays (LON:BARC), when the broker wrote in a research note that the sector could outperform the S&P this year. Financials gained, led the Dow Jones Industrial average higher with gains from Goldman Sachs (NYSE:GS) and JPMorgan (NYSE:JPM).
Tesla Inc delivered fewer-than-expected Model 3 sedans in the fourth quarter and cut U.S. vehicle prices due to a loss of a green tax credit. The electric automaker's shares slid 6.5 percent.
General Electric (NYSE:GE) Co jumped 6.6 percent in heavy trading as bargain hunters bought the stock in the wake of its 56.6-percent plunge in 2018.
In the coming weeks, the fourth-quarter reporting period will be underway. Analysts see S&P 500 companies posting profit gains of 15.8 percent, significantly smaller than the third quarter's 28.4 percent advance.
Investors look to Thursday's PMI report on U.S. factory activity, and the Labor Department's payrolls data on Friday, for signs of cracks in what has been a fairly robust U.S. economy.
The U.S. federal government shutdown entered its 12th day on the eve of Democrats taking the helm of the U.S. House of Representatives, raising the spectre of a possible spending impasse in congress as lawmakers wrestle over funding for the U.S.-Mexico border wall.
Advancing issues outnumbered declining ones on the NYSE by a 1.98-to-1 ratio; on Nasdaq, a 1.99-to-1 ratio favoured advancers.
The S&P 500 posted no new 52-week highs and 3 new lows; the Nasdaq Composite recorded 9 new highs and 58 new lows.