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."
Poorly performing energy stocks overshadowed a bounce earlier that was inspired by the latest jobs data. Jobless claims rose to 290,000, the highest since mid-September, compared to the 280,000 expected by economists. Though higher than expected, the number of U.S. citizens applying for unemployment benefits remains near its lowest level since 2000.
Job openings slipped slightly to 4.735 million in September from 4.835 million a month earlier, according to the Job Openings and Labor Turnover Summary. Analysts expected 4.8 million openings. At current levels, job openings are the second highest, after August, since January 2001, providing further evidence of the labor market recovery.
Walmart (WMT) shares were the best performer of the Dow, up by 4.5%, after the world's largest retailer reported comparable-store sales growth for the first time in seven quarters. The company had seen sluggish sales after the government cut food stamp benefits and the broader economy kept low-income customers from spending big.
Amazon (AMZN) ended its months-long feud with book publisher Hachette, a standoff resulting from disagreements in pricing and revenue cuts. The agreement will allow Hachette to decide upon e-book prices, with added incentives to keep prices low.
Warren Buffett's Berkshire Hathaway (BRK.A) agreed to buy Procter & Gamble's (PG) Duracell battery business in a deal that includes $1.7 billion in cash and about $4.7 billion in P&G stock currently held by the billionaire investor's holding company. P&G shares rose slightly.
Kohl's (KSS) fell 2.7% after the retail chain reported comparable-store sales down 1.8% in its quarter. J.C. Penney (JCP) shares were down 7.4% after the retail chain posted a quarterly net loss of 77 cents a share, narrower than forecasts, but on slowing sales.
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-- Written by Keris Alison Lahiff in New York.