Stock Pare Losses on Unexpected Drop in Crude Inventories

Stocks moved off of lows on Thursday morning after an unexpected drop in crude inventories extended gains in oil prices. 

The S&P 500 was down 0.25%, the Dow Jones Industrial Average fell 0.44%, and the Nasdaq declined 0.17%.

Crude moved higher after the Energy Information Administration reported a decline of 3.4 million barrels for U.S. inventories in the week ended May 6. Analysts had expected an increase of 300,000 barrels. 

Canada's oil industry was beginning to recover from a massive wildfire that had impacted operations in the Alberta region. Royal Dutch Shell (RDS.A) has resumed production at its Albian mine, while other oil sand companies near Fort McMurray are beginning to come back online. The ongoing blaze has caused erratic swings in the price of West Texas Intermediate.

Crude was up 2.2% to $45.64 a barrel on Wednesday.

Walt Disney (DIS) - Get Report fell 5% following a disappointing second quarter. The world's largest entertainment company reported earnings of $1.36 a share, 3 cents below estimates, while sales of $13 billion missed forecasts by $200 million. Expectations were high heading into the earnings report after the box office success of Star Wars: The Force Awakens and Zootopia.

Macy's (M) - Get Report was 12% lower after reporting its fifth straight quarterly same-store sales decline. Sales at stores open for at least a year fell 6.1% in the first quarter, nearly double the expected decline. The retailer also cut its full-year outlook, expecting a prolonged period of depressed sales.

Fossil Group (FOSL) - Get Report tumbled 30% after issuing a far-weaker second quarter than analysts expected. The fashion accessories brand expects current-quarter earnings breakeven to 15 cents a share, well below consensus of 58 cents. First-quarter earnings and sales also missed forecasts.

Other retail stocks were also in decline. Michael Kors (KORS) tumbled 11%, Kate Spade (KATE) slid 3%, and Coach (COH) fell 4%. The SPDR S&P Retail ETF (XRT) - Get Report was down 3.1%. 

Wendy's (WEN) - Get Report bested its quarterly estimates with adjusted earnings of 11 cents a share beating by 5 cents. Same-store sales in its first quarter rose 3.6%. The fast food chain expects full-year earnings between 38 cents and 40 cents a share, up from previous guidance of 35 cents to 37 cents.

Staples (SPLS) and Office Depot (ODP) - Get Report were both under pressure on Wednesday morning after a federal judge blocked the planned $6.3 billion merger between the two office-stationery companies. The Federal Trade Commission found that there was "reasonable probability that the proposed merger will substantially impair competition." Staples shares slid 15%, while Office Depot plummeted 27%.

Electronic Arts (EA) - Get Report climbed after topping estimates in its recent quarter. Adjusted earnings of 50 cents a share came in 8 cents above estimates, while revenue of $924 million exceeded expectations by $35 million.