The Dow industrials ended lower Wednesday as IBM’s shares got walloped; however, gains in shares of energy-related firms helped the broader market post modest gains.

Wall Street showed a muted reaction to the release of the Beige Book report, which underscored that economic activity remained at “a modest to moderate pace” in March and early April.

What are the main benchmarks doing?

The Dow Jones Industrial Average ended down 38.56 points, or off 0.2%, at 24,748.07, with shares of International Business Machines Corp. exacting a roughly 80-point toll on the price-weighted average.

Meanwhile, the Dow Transportation Average rallied 1.8% to 10,770.15, which some analysts see as a bullish sign for the overall market.

The S&P 500 index advanced about 2.25 points, or about 0.1%, at 2,708.64, even as six the index’s 11 main sectors registered a loss, led by a 0.9% decline in consumer staples. Energy shares led the gains, up 1.6%, while industrials gained 1% and materials advanced 0.7%.

Meanwhile, the Nasdaq Composite Index closed up 14.14 points, or 0.2%, at 7,295.24.

What’s driving markets?

First-quarter earnings reports have grabbed investors’ attention this week, with Netflix Inc. , Goldman Sachs Group Inc. and UnitedHealth Group Inc. among the companies that have posted encouraging results.

The S&P 500 components are expected to see earnings growth of 17.3% for the period, the fastest rate of expansion since 2011.

North Korea also has been a concern this year, and the isolated nation was in the news again Wednesday, thanks to reports that Central Intelligence Agency Director Mike Pompeo took a secret trip to meet with North Korean leader Kim Jong Un in Pyongyang over Easter weekend. Pompeo went to discuss the terms of Kim’s upcoming summit with President Donald Trump.

Market participants also have been focused on the yield curve, the gap between short- and long-term Treasury yields, as a gauge of the economic outlook. The spread between the two-year Treasury note yield and the 10-year Treasury note has been hovering around its narrowest in more than a decade. The spread was at 43.8 basis points Wednesday. That partially reflects investors’ confidence that the Fed will hike rates despite concerns about sluggish inflation and economic output.

What are strategists saying?

“What we are seeing today is a rotation out of technology stocks and into commodity-heavy sectors. It seems that positioning leading up to the earnings season more than anything else is driving current market action,” said Ian Winer, head of the equities division at Wedbush Securities.

“For example, earnings in some sectors are leading to big rallies, such as in transports, but solid financials were sold right after solid earnings. We are watching this reaction with interest,” Winer said.

Naeem Aslam, chief market analyst at Think Markets U.K., in a note to investors said fears around a potential trade war and geopolitical concerns “have faded very much.” He was referring to the worries in recent weeks about the trade skirmish between the U.S. and China, as well as jitters about the conflict in Syria.

Which stocks are in focus?

Shares in air carrierUnited Continental Holdings Inc. and railroad operatorCSX Corp. each rose more than 4.8% and 7.9%, respectively, after the companies each posted better-than-expected quarterly profits late Wednesday.

IBM’s stock fell 7.5%, marking its worst one-day decline since April 19, 2013, according to FactSet data, as analysts noted its earnings beat late Tuesday was driven by a one-time tax gain. In addition, IBM Chief Financial Officer James Kavanaugh told analysts on the tech titan’s conference call that they shouldn’t count on a continued boost from new mainframe sales.

Shares in banking giant Morgan Stanley closed marginally higher, up less than 0.1%, after its quarterly profit topped estimates. Morgan Stanley joined other large banks whose stock prices fell even as earnings beat consensus forecasts.

Health-care heavyweight Abbott Laboratories shares dropped 0.4% although the company reported first-quarter profit and sales that rose above expectations.

Southwest Airlines Co.’s stock rose 2.9%, as investors shook off an incident involving the first passenger death in its 50-year history following a blown engine. The airline said it has started an investigation into the accident.

VMware Inc. climbed 4.3% following reports that storied activist investor Carl Icahn has taken a medium-size stake in the software company.

Shares of Textron Inc. soared 6.8% after the industrial manufacturing company said it agreed to sell its tools and test business to Emerson Electric Co. for $810 million in cash, and reported first-quarter profit and sales beat estimates.

Which economic reports are on tap?

The Fed’s Beige Book showed that economic activity remained at a modest to moderate pace, though nine of the 12 regional banks expressed concerns about trade tariffs, centered on the tit-for-tat spat between Beijing and Washington.

Check out: MarketWatch’s Economic Calendar

In a speech at Lehman College in the Bronx, New York Fed President William Dudley, suggested that the Fed could target a range of inflation, say between 1.5% and 2.5%, rather than the current 2% objective. The voting member of the Federal Open Market Committee said a gradual path of interest-rate increases remains appropriate, implying a further two or three rate increases are ahead in 2018 as the central bank attempts to normalize monetary policy.

Separately, the Fed’s vice chair for bank supervision, Randal Quarles, was slated to make remarks at the Bretton Woods Committee in Washington at 4:15 p.m. Eastern.

What are other markets doing?

European stocks ended higher, and Asian markets also closed with gains.

The ICE U.S. Dollar Index traded virtually flat. Gold futures settled at $1,353.50 an ounce, up $4, or 0.3%, marking the highest finish in a week.

Oil futures closed at a nearly 3½-year high after government data showed an unexpected decline in weekly U.S. crude supplies.

—Victor Reklaitis contributed to this article