US open: Stocks decline as oil prices reverse gains

US stocks declined as oil prices reversed gains and trading volumes were thin ahead of the New Year.

The Dow Jones Industrial Average was down 0.07% while S&P 500 futures were down 0.11% and the S&P 500 fell 0.16%.

The recovery in oil prices proved fleeting as they resumed their slide following a brief respite on Tuesday.

West Texas Intermediate was down 2.6% to $36.89 per barrel and Brent crude was 2.2% lower at $36.96 per barrel, as worries about slowing demand and high supply weighed.

Late on Tuesday, a report from the American Petroleum Institute showed an increase of nearly 3m barrels in crude supplies in the week ended 25 December.

Forecasts that a cold snap in Europe could be short-lived also dented oil prices.

Comments from the International Monetary Fund’s managing director Christine Lagarde did little to help the overall tone.

In a guest article for German daily Handelsblatt, she said global economic growth will be "disappointing" next year.

"In many countries the financial sector still has weaknesses and in emerging markets the financial risks are increasing. All of that means global growth will be disappointing and uneven in 2016," she said, pointing to low productivity, ageing populations and the effects of the global financial crisis.

In corporate news, KaloBios Pharmaceuticals dropped after the company, which is majority-owned by biotech investor Martin Shkreli, filed for bankruptcy.

Pep Boys - Manny Moe and Jack slumped following news that the bidding war for the company, which offers car parts and repairs, appeared to be over.

Amazon and Google parent Alphabet Inc slipped after shares reached a record closes on Tuesday.

On the macroeconomic front, pending home sales are due at 1500 GMT. Investors will also eye the release of US Energy Information Administration data on weekly oil stocks later on in the session.