U.S. stocks fluctuate narrowly amid oil decline

U.S. stocks wavered fractionally below the flatline in the morning session Wednesday, as oil prices tumbled again after solid gains.

By midday, the Dow Jones Industrial Average dipped 50.27 points, or 0.28 percent, to 17,670.71. The S&P 500 fell 7.35 points, or 0.35 percent, to 2,071.01. The Nasdaq Composite Index was down 19.94 points, or 0.39 percent, to 5,088.00.

In a light week of economic reports, the volatility in oil prices dominated market sentiment.

Both the U.S. oil and Brent crude traded nearly 3 percent lower around midday Wednesday as the global supply glut continued to weigh on the market.

As it will take years to wash out the whole supply in oil market and reach the balance point where supply meets demand, many analysts do not expect oil prices will recovery soon.

On the economic front, U.S. pending home sales in November declined slightly for the third time in four months as buyers continue to battle both rising home prices and limited homes available for sale, according to the National Association of Realtors.

The Pending Home Sales Index decreased 0.9 percent to 106.9 in November from an upwardly revised October reading.

On Tuesday, U.S. stocks posted solid gains as Wall Street cheered over a recovery in oil prices amid positive data in a holiday-shortened week.

Analysts attributed some of Tuesday's gains to a so-called Santa Rally, which roughly spans the last five to seven days of December.

Since 1928, the S&P 500 has posted an average gain of 1.3 percent in the last five trading days of the year, rising 76 percent of the time.

The U.S. stock markets will be closed on Friday for New Year's Day. Endit