By Michael Wursthorn and Georgi Kantchev 

The Dow Jones Industrial Average wobbled between gains and losses, but advances among technology companies helped the blue-chip index recoup much of an earlier 500-point loss that would have pulled it into correction territory.

Shares of Apple Inc., Microsoft Corp. and International Business Machines Corp. notched modest gains, helping to steady the index, which tumbled 4.5% last week on trade-related tensions and worries about higher interest rates.

Major indexes were under pressure most of the day as investors worried that tensions would be ramped up by U.S. Trade Representative Robert Lighthizer's pledge on Sunday to enact further tariffs and sanctions against China if the two countries can't reach a deal by the end of the 90-day truce.

Tumbling oil prices and British Prime Minister Theresa May's decision to delay a vote on her government's Brexit bill added to investors' global anxieties and helped pull the Dow industrials down as much as 508 points at one point.

"This is a tough market," said Steve Chiavarone, who runs Federated Investments' global allocation fund. He added that global tensions are leading investors to price "in a recession where you see some stocks down 30% or 40%."

Mr. Chiavarone has cut his stock portfolio in recent months but continues to favor equities over other asset classes, forcing him to contend with the market's massive bouts of volatility. "We pulled in the reins a bit, but you've got to be tilted in the direction where the fundamentals point and they don't say we're headed for a recession," he added.

But while economic indicators continue to portray a growing U.S. economy, albeit at a slightly slower rate, pronouncements from a number of U.S. companies, including Coca-Cola Co., DowDuPont Inc. and Chevron Corp., around rising commodities and materials costs have contributed to the fear of an economic slowdown, analysts said.

Various tariffs enacted by the Trump administration haven't helped, with American companies paying record amounts in customs duties to import products.

And with just over three months until the U.K. is scheduled to leave the European Union, the government's continued wrangling over an exit deal has only added to the uncertainty, analysts and investors added.

The Dow industrials were mostly flat in recent trading, adding just 10 points, or less than 0.1%, to 24398. A close below 24145.55 would put all three major U.S. stock indexes simultaneously in correction territory -- typically defined as a tumble of at least 10% from a recent high -- for the first time since March 2016.

The S&P 500 added 0.2%, while the Nasdaq Composite rose 0.8%.

Energy stocks notched heavy losses that coincided with a 1% pullback in crude oil prices. Energy companies in the S&P 500 fell more than 2% in recent trading.

Financial stocks also stumbled, with lenders in the S&P 500 extending their quarterly losses to nearly 11% as expectations for slower growth and an inversion of shorter-dated Treasury yields weighed on the sector.

Stocks in Europe closed at their lowest value in more than two years after Mrs. May decided to postpone the vote on her government's Brexit bill. The Stoxx Europe 600 fell 1.9%, putting it off more than 18% from its April 15 record, leaving the index near bear-market territory, or a drop of 20% or more from a recent high.

The losses follow a bruising week that sapped more than 4% from each of the major U.S. indexes. Both the Dow industrials and the S&P 500 are in the red for 2018, putting the two on pace for their worst year since 2015.

Investors increasingly expect major indexes to continue to struggle for the remainder of the year, and more money managers are paring back their expectations for 2019.

BlackRock, for example, expects global growth to slow in 2019 and corporate profits to moderate, putting stocks on a path to likely eke out a positive return, Richard Turnill, BlackRock's global chief investment strategist, wrote in a report for the asset manager. With rising interest rates and the potential for political risks, confidence and spending could fluctuate even more than usual next year, stirring volatility, Wells Fargo Investment Institute added in its 2019 outlook report.

Besides that, world trade growth is already slowing and some other leading indicators are starting to move down, economists at Citigroup wrote in a report to clients Monday.

"Data for 2019 is incrementally less positive," added Aaron Dunn, co-director of value investing at Eaton Vance. "The market is pricing in a peak economic environment."

In Asia, markets fell across the board, with Japan's Nikkei shedding 2.1%.

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com

(END) Dow Jones Newswires

December 10, 2018 15:12 ET (20:12 GMT)

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