NEW YORK (TheStreet) -- The S&P 500 slipped below the flatline on Thursday afternoon as a continued slide in oil prices bruised energy stocks.
Oil prices tanked after China released softer-than-expected factory forecasts, triggering fears its economy could see its weakest year in nearly a quarter of a century. A day earlier, OPEC warned of weaker demand in 2015 tied to global oversupply. However, Kuwaiti oil minister Ali Al-Omair said the collective countries won't limit production when the organization meets at the end of the month.
West Texas Intermediate crude oil tumbled below $76 a barrel, a three-year low, down 3% to $74.85 a barrel.
Chevron (CVX) and Exxon Mobil (XOM) fell just more than 1% and Hess (HES) slipped 2.3%. Oil and gas driller Helmerich & Payne (HP) tumbled 8.6%, the worst performer on the S&P, after quarterly earnings of $1.59 a share missed estimates by 9 cents.
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Benchmark indices fell from session highs. The S&P 500 was down 0.1%, the Nasdaq added 0.04% and the Dow Jones Industrial Average climbed 0.15%. Small caps were among the hardest hit, with the small-cap index Russell 2000 down 0.91%. The VIX Volatility Index, commonly referred to as the "fear index," spiked 8.8%.
Plummeting oil prices aren't all bad, though. "The softer oil and commodity prices are likely to add some boost to corporate margins for many segments of the economy," Wells Fargo's Stuart Freeman and Scott Wren wrote in a note. "Lower oil and gas prices have acted as 'tax cuts,' putting more money in the pockets of U.S. consumers. Consumer discretionary income should increase as a result."