The S&P 500 eked out a small gain while the Dow declined after a volatile trading session on Wednesday, with weakness in sectors such as consumer staples and financials offsetting strong gains in the energy and industrial indexes.

Higher oil prices boosted energy stocks while transport stocks such as CSX Corp helped the industrial sector. But IBM's (IBM.N) 7.5 per cent drop was the biggest drag on the S&P after the technology company's quarterly profit margins missed Wall Street targets.

"There's a lot of headlines pulling the market in different directions. The most notable is energy prices pulling that sector higher," said David Joy, chief market strategist at Ameriprise in Boston.

Joy attributed a drop in financial stocks to a flattening yield curve in U.S. treasuries.

"Earnings and the yield curve are the two biggest influences," said Joy, adding that "transports are very strong today which is a very good sign for the economy."

No. 3 U.S. railroad operator CSX (CSX.O) jumped 7.8 per cent after topping profit estimates. Its news lifted other railroads, and helped to push the Dow Jones Transport index up 1.7 per cent.

Also United Continental (UAL.N) gained 4.8 per cent and lifted other airline stocks after reporting a better-than-expected quarterly profit.

Trading was choppy, with the Dow swinging between positive and negative territory while the S&P 500 gave up most of its gains in the last few minutes of trading.

The Dow Jones Industrial Average fell 38.56 points, or 0.16 per cent, to 24,748.07, the S&P 500 gained 2.25 points, or 0.08 per cent, to 2,708.64 and the Nasdaq Composite added 14.14 points, or 0.19 per cent, to 7,295.24.

In late afternoon trade the S&P briefly lost ground after a Federal Reserve report said robust business borrowing, rising consumer spending, and tight labor markets indicated the U.S. economy is on track for continued growth, with trade war risks being the one big outlier.

However, Mark Heppenstall, chief investment officer at Penn Mutual Asset Management in Horsham, Pennsylvania, said investors were hopeful for a positive outcome with China.

"China trade tensions seem to have moved to the back burner," he said. "Earnings are part of the equation as well. The bar was high. There was a risk expectations would outpace what comes through but generally earnings have been favorable."

Wall Street expects S&P 500 first-quarter earnings to grow 19.4 per cent, according to Thomson Reuters data.

Oil futures settled up 2.9 per cent due to a decline in U.S. crude inventories and after sources signaled top exporter Saudi Arabia wants to see crude prices closer to US$100 a barrel. The S&P energy sector was up 1.6 per cent.

The CBOE Volatility index ended up 0.35 point at 15.60, its first daily increase after six days of declines.

Lam Research (LRCX.O) fell 4 per cent on analyst concerns about a slowdown in demand for its chip equipment.

The Philadelphia SE Semiconductor index finished down 1 per cent.

Advancing issues outnumbered declining ones on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.09-to-1 ratio favored advancers.

The S&P 500 posted 39 new 52-week highs and two new lows; the Nasdaq Composite recorded 131 new highs and 36 new lows.

On U.S. exchanges 6.46 billion shares changed hands, compared to the almost 7 billion average for the last 20 days.

CANADIAN STOCKS

Canada's main stock index rose for the fifth straight day on Wednesday to reach a four-week high, as energy and metal mining companies led broad-based gains, boosted by higher commodity prices.

The Toronto Stock Exchange's S&P/TSX composite index closed up 176.67 points, or 1.15 per cent, at 15,529.97.

Shares of Suncor Energy (SU.TO) rose 2.3 per cent and oil and gas producer Canadian Natural Resources (CNQ.TO) was up 3.3 per cent.

The government of British Columbia said it would file a legal challenge to Kinder Morgan Canada Ltd's Trans Mountain pipeline expansion by month-end, even as an opinion poll showed mounting public support for the project.

Still, shares of Kinder Morgan Canada (KML.TO) rose 2.8 per cent. After the close, the company reported a 5.1 per cent drop in first-quarter profit, hurt by a fall in volumes of crude oil and refined products transports.

The materials group, which includes precious and base metals miners and fertilizer companies, added 1.9 per cent.

Copper prices advanced 2.3 per cent to US$7,036.5 a tonne.

Gains for the TSX came as the Bank of Canada signaled more interest rate hikes would be coming after it held its benchmark rate steady at 1.25 per cent, but said it did not know when or how aggressive it would need to be to keep inflation in check.

All of the TSX's 10 main groups climbed. That included a 0.5 per cent gain for financials, while industrials were up 1.2 per cent.

The largest per centage gainer on the TSX was Torc Oil & Gas, which rose 9.9 per cent, while the largest decliner was Alaris Royalty (AD.TO), down 6.7 per cent.

Among the most active Canadian stocks by volume were Bombardier Inc (BBDb.TO), up 4.0 per cent to US$3.92, Athabasca Oil Co (ATH.TO), up 9.1 per cent to US$1.56 and Aurora Cannabis (ACB.TO), up 2.3 per cent to US$8.63.

The index posted 19 new 52-week highs and two new lows.