A bounce in oil prices on Monday from five-year lows had helped foster a broadly more positive tone in Asia, but both Brent and U.S. crude oil were down more than 1 percent in early U.S. trading on Tuesday. Brent crude oil has lost more than a third in price since June.
U.S. stocks were higher, with shares of Biogen Idec (BIIB.O) rising 6.8 percent and giving the S&P 500 its biggest boost after favorable data from the Phase III trial of its Alzheimer's drug. The NASDAQ biotech index .NBI was up 1.6 percent.
The S&P energy index .SPNY was up 0.9 percent, though the index has fallen sharply with oil prices and is down 14 percent since June.
"The broader market should be able to weather this storm, but (the energy sector) will still take a hit," said James Liu, global market strategist for JPMorgan Funds in Chicago.
The Dow Jones industrial average .DJI was up 62.05 points, or 0.35 percent, at 17,838.85. The Standard & Poor's 500 Index .SPX was up 9.67 points, or 0.47 percent, at 2,063.11. The Nasdaq Composite Index .IXIC was up 22.94 points, or 0.49 percent, at 4,750.29.
MSCI's global share index .MIWD00000PUS was up 0.2 percent. European shares .FTEU3 were up 0.5 percent. Emerging market shares tracked by MSCI .MSCIEF were down 0.03 percent.
In the energy market, Brent crude was last down 85 cents at $71.69 a barrel, while U.S. crude oil was down 90 cents at $68.10.
Behind the shock of the plunge in oil is a deeper debate about whether developed economies are slipping into a prolonged period of stagnation, or just coming out of the financial crises of the past five years more slowly than previously hoped.
IMF Managing Director Christine Lagarde said late on Monday that cheaper oil was a positive for the global economy. The drop has given a lift to travel companies and should have a positive impact on consumer spending.
DOLLAR GAINS
The dollar rose against a basket of currencies, helped by comments from two Federal Reserve officials who stressed the positive impact on the U.S. economy from a decline in oil prices.
Fed Vice Chairman Stanley Fischer and New York Fed President William Dudley said at separate events on Monday that soft oil prices would only temporarily dampen overall U.S. prices. The comments suggested the Fed was not letting energy markets distract it from lifting rates.
The dollar index .DXY was up 0.7 percent at 88.591.
U.S. Treasuries prices fell, pressured by institutional investors readying for a big corporate bond deal by leading retailer Amazon (AMZN.O).
The 10-year Treasury note US10YT=RR was last off 17/32 to yield 2.2782 percent.
