NEW YORK (TheStreet) -- Stocks closed only slightly lower Thursday, recovering from heavier losses sustained earlier in the day. Crude oil, which had been a major pressure earlier in the session, reversed course by the afternoon and closed higher.
The S&P 500 was down 0.12%, the Dow Jones Industrial Average fell 0.2%, and the Nasdaq slipped 0.17%.
West Texas Intermediate crude gained 0.3% to $57.68 a barrel. Earlier, the Energy Information Administration reported a decline of 2.8 million barrels in crude supplies for the week ended May 22. Economists had expected inventories to fall by 1.8 million barrels.
Energy remained the worst-performing sector on the S&P 500, however. The sector was under pressure as the U.S. dollar continued its run higher on signs the Federal Reserve would hike rates as key international markets such as the eurozone introduce their own monetary stimulus. The stronger U.S. dollar was hurting perceived demand for U.S. oil traded in the greenback.
Joy Global (JOY) and Transocean (RIG) - Get Report were among the worst performers on the S&P 500. Joy Global was lower ahead of its earnings report scheduled for release next week. Transocean fell after Chief Financial Officer Esa Ikaheimonen said he is stepping down, effective immediately.
John Williams, president of the San Francisco Fed, joined a chorus of Fed members and economists who expect a rate hike this year if the economy continues to improve as expected. Speaking to the Monetary Authority of Singapore, voting member Williams said he expects growth of 2% and unemployment under 5% this year.
Pending home sales increased in April for the fourth straight month, reaching a nine-year high of 112.4, up 3.4% from March and 14% from a year earlier, according to the National Association of Realtors. Economists had expected growth of 1% in April.
Jobless claims climbed to a five-week high, adding 7,000 to 282,000. Economists had expected the number of people filing new claims for unemployment benefits to fall to 270,000 from a revised 275,000 the week earlier. The measure was closely watched ahead of the May jobs report to be released on Friday, June 5.
"The trend in claims, below the pre-recession trough for weeks now, remains in line with our forecast for continued tightening in labor market slack ahead and with our expectation for another solid payrolls report next Friday," said BNP Paribas' Derek Lindsey.
In earnings, Costco (COST) - Get Report fell nearly 1% after missing sales estimates in its third quarter. The company earned $1.17 a share, narrowly beating by a penny, while revenue of $26.1 billion fell short by $530 million.
Abercrombie & Fitch (ANF) - Get Report added nearly 14% despite posting a wider-than-expected loss. The teen retailer reported a loss of 53 cents a share, 19 cents wider than expected. Revenue fell 13.7% to $709.42 million, missing estimates.