Wall Street was trading in positive territory ahead of the close of trading on Monday as U.S. crude rose nearly 2%, reversing its course.
US benchmarks eventually made their mind up to travel in forward gear, with the Dow Jones average rising 103 points to 17,369, the S&P 500 climbing 10 points to 2,022 and the Nasdaq Composite firming up 19 points to 4,952.
U.S. crude rose 1.9% to $36.31, while Brent futures for January delivery settled down 1 cent at $37.92 a barrel.
Early in the day, both benchmarks fell by as much as 4%, before turning around midday.
LUNCHTIME
The three major indexes were all over the shop in the morning session, as tension mounts ahead of Wednesday's Federal Reserve interest rate decision.
The Dow Jones average was up 59 points, or 0.3%, at 17,314 and the S&P 500 was two points firmer at 2,015, but the Nasdaq Composite, which earlier in the day had been up when the others were down, was five points lighter at 4,930.
The tech-heavy Nasdaq index is hobbled by speculation index heavyweight Apple (NASDAQ:AAPL) is planning a bid for GoPro (NYSE:GPRO), the fast-fading action camera company.
Apple was off 1.6% in lunchtime trading, while GoPro slumped 15.9% after Morgan Stanley chopped the price target to US$12 from US$23.
Atara Biotherapeutics (NASDAQ:ATRA) lost a quarter of its value after the clinical stage biopharmaceutical company reporting disappointing results from a mid-stage study for its kidney drug.
There was cheerier news for International Stem Cell (OTCMKTS:ISCO), which rose by more than a fifth after it said it received authorization to start a Phase I/IIa clinical trial, dose escalation trial of human parthenogenetic stem cells-derived neural stem cells (ISC-hpNSC) in patients with moderate to severe Parkinson's disease.
US open
The oil price has made it back above U$35 a barrel, offering some respite for the markets, though energy stocks continue to drag the benchmarks lower.
The price of West Texas intermediate for January delivery was US$35.21 a barrel in early New York trading, down 41 cents on the day but off its lowest level of US$34.67 – a level not seen since 19 February, 2009.
The Dow Jones industrial average was off 34 points (0.2%) at 17,231, while the broader-based S&P 500 was down a point (0.01%) at 2,011; the Nasdaq Composite was defying the trend, rising five points (0.1%) to 4,938.
With the oil price still in a downward spiral, investors are giving the cold shoulder to energy stocks such as CONSOL Energy (NYSE:CNX), down 6%, and fellow travelers such as oil field support services provider Baker Hughes (NYSE:BHI), down 3.7%.
Pens maker Newell Rubbermaid (NYSE:NWL) is off 6% after unveiling a US$13.2bn cash-and-stock takeover of Jarden (NYSE:JAH).
Among the small caps, NephroGenex (NASDAQ:NRX) has sky-rocketed, soaring 60%, after it received US Food and Drug Administration (FDA) clearance for the company’s Investigational New Drug (IND) application for clinical studies with intravenous Pyridorin for the treatment of acute kidney injury.
US pre-open
Despite oil dropping below US$35 a barrel in New York trading blue chips look set to open moderately firmer.
It is the first time since 2009 that the price of West Texas intermediate, the US benchmark for crude, has fallen below US$35, while natural gas prices are at their lowest levels since 2002.
There is some consolation for investors still reeling from Friday's shake-out, though, as the major benchmarks look set to open cautiously higher ahead of this week's big decision on interest rates from the Federal Reserve.
The Dow Jones industrial average, which plunged 310 points on Friday to 17,265, is tipped to open 20 points or so higher, while the broader-based S&P 500, according to spread betting quotes, should open three points above Friday's close of 2,011.
Pre-market trading suggests that oil rig leasing firm Transocean (NYSE:RIG) and energy play Chesapeake Energy (NYSE:CHK) will be among the weakest blue-chips when trading starts.