The Dow Jones Industrial Average climbed 171.14, or 0.7%, to 24,575.62 after spending much of the day lower. The Nasdaq Composite edged up 0.1% to 7,025.77.
IBM was the biggest winner among the blue chips, rallying 8.5% after fourth-quarter results came in better than expected. The company provided 2019 earnings guidance of $13.90 per share, which beat analysts' estimates of $13.79.
Procter & Gamble rose 4.9% as the consumer goods giant announced second-quarter earnings and sales that beat expectations.
Verizon Communications Inc (NYSE:VZ) was up 1.4% after The Wall Street Journal reported that the company’s media group was laying off 7% of its staff.
The S&P 500 Index increased 0.2% to 2,638.70, while the Russell 2000 index of small-caps slipped 0.2% to 1,454.26.
Capital One Financial Corp (NYSE:COF) was one of the biggest losers among the S&P 500 companies, falling 6.2% after missing fourth-quarter revenue expectations.
Ford Motor Co (NYSE:F) slipped 0.2% in after-hours trading after citing “potential” for improvement.
Up in Canada, the TSX slipped 0.2% to 15,208.33.
Earlier this week, the International Monetary Fund pared its estimates for global economic growth, forecasting a 3.5% growth rate this year.
1:30 PM: US stocks slip into red as concerns about slowing economy mount
The Nasdaq and the S&P 500 reversed direction and slipped in afternoon trade as a robust round of quarterly earnings reports failed to offset concerns about the slowing economy.
As the afternoon session gathered pace, the S&P 500 shed 7 points to 2,625 while the tech-laden Nasdaq fell by 32 points to 6,988.
Nine of the eleven S&P 500 sectors were also trading in the red, with only utilities and consumer staples groups bucking the trend.
And after jumping by almost 300 points earlier in the day, the Dow Jones Industrial Average pared its gains to a rise of 63 points or 0.26% to hover at 24,469.
United Technologies Corporation (NYSE:UTX) was still trading nearly 5% higher at $116.38 after the jet engine maker delivered an optimistic forecast and said it would see as much as $77 billion in sales this year.
The Russell 2000 index of small-cap stocks was also off by 9 points at 1,448.40 while Toronto’s TSX shed 48 points to hit 15,186.
Earlier this week, the International Monetary Fund (IMF) pared back its estimates for global economic growth, forecasting a 3.5 percent growth rate this year, and 3.6 percent in 2020.
10:00 AM: US stocks post strong gains as Wall Street cheers positive earnings, outlook
US stocks opened higher Wednesday getting a boost from strong corporate earnings and rebounding from the previous session's sharp selloff.
The Dow Jones Industrial Average gained 247.87 points, or 1.02% to 24,652.35 led higher by Procter & Gamble and United Technologies. Dow component IBM also had a positive impact on the Big Board. The technology giant rallied 9.2% after it posted fourth quarter earnings that beat estimates and issued an outlook for the year that was higher than forecasts.
Procter & Gamble posted modestly stronger-than-expected second-quarter earnings and raised its full-year sales guidance. The stock soared 6.1%.
Meanwhile, the S&P 500 ran up 19 points or 0.72% to 2,651.95 led higher by Waters Corp and Synchrony Financial.
The Nasdaq Composite gained 58.22 points, or 0.83% to 7,078.58 after the opening bell.
Elsewhere, the Russell 2000 index of small-cap stocks gained 0.63% to 1,466.63.
7:15 AM: US shares seen heading higher at open as Davos summit continues; more earnings on tap
US stocks are seen recouping losses at the New York bell on Wednesday.
Wall Street stocks tumbled around the globe yesterday on growth fears and jitters over Britain's withdrawal process from the EU. The Financial Times also reported that the US had cancelled preparatory trade discussions with Chinese officials.
But Larry Kudlow, head of the National Economic Council, told CNBC that there has been no cancellation.
Today, as the Davos summit continues in Switzerland, the Bank of Japan added to worries as it predicted that inflation in the country would drop even further below its 2% target this year. The central bank kept interest rates on hold.
People are very harsh on the Davos crowd but it's very cold there. They are suffering in freezing temperatures for us.— Karl Sharro (@KarlreMarks) 23 January 2019
In Asia overnight, the Nikkei 225 shed around 29 points to 20,593. The Dow Jones Industrial Average closed down 301 points at 24,404 and futures are today up 103 points.
The S&P 500 finished nearly 38 points off at 2,632, while futures are up Wednesday at 8.50 points. The tech-heavy Nasdaq lost over 136 points at 7,020, while futures are pointing up 22.5 points.
Up in Toronto, the TSX also lagged on Tuesday, losing over 120 points at 15,233.
In Europe, at the time of writing, generally markets are higher, but the FTSE 100 in London is down over 26 points at 6,875.
Today throws up another bunch of corporate earnings reports in the US.
James Hughes, chief market analyst at Axitrader, also highlighted ahead of the Wall Street restart that there was a vote scheduled on Capitol Hill tomorrow "which could – at least temporarily – end the US government shut down".
"Assuming this can be delivered then some kind of relief rally for stocks may well be seen as a result," he said.