NEW YORK (TheStreet) -- Stocks fell to session lows after briefly flirting with positive territory Thursday morning. The International Monetary Fund gave markets a short-lived shot in the arm after calling upon the Federal Reserve to delay a rate hike until the first half of 2016.
The S&P 500 was down 0.38%, the Dow Jones Industrial Average fell 0.42% and the Nasdaq slid 0.24%.
The IMF said Thursday the Fed should wait until there are stronger signs of wage or price inflation in its annual review of the U.S. economy. The Fed is widely expected to raise rates from near-zero crises levels in September.
"Based on the mission's macroeconomic forecast, and barring upside surprises to growth and inflation, this would put lift-off into the first half of 2016," the IMF said in its report.
Dish Network (DISH) spiked more than 5% on reports the company is discussing a potential merger with T-Mobile (TMUS). Discussions are in their early stages, according to The Wall Street Journal. T-Mobile shares added 4.4%.
European markets were selling off as a global bond rout continued. German 10-year Bund yields hit a high of 0.995% earlier in the session, while U.S. 10-year bond yields jumped to 2.37%. The bond market has been in focus since European Central Bank President Mario Draghi made comments on Wednesday that volatility would remain.
Initial jobless claims in the U.S. fell by 8,000 to 276,000 in the week ended May 30, hovering at 15-year lows, according to the Labor Department. Economists had expected the number of people applying for unemployment benefits to fall at a slower pace to 278,000. The less-volatile four-week moving average increased 2,750 to 274,750.
"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 print for May," said BNP Paribas analyst Derek Lindsey.
U.S. productivity in the first quarter fell by a revised 3.1% annual pace, according to the latest government data, a far steeper decline than a first estimate of 1.9%. Economists expected the measure to be revised to a 3% drop as the U.S. economy struggled with winter weather and West Coast port closures.
Greece's debt negotiations appeared at a stalemate ahead of the country's repayment deadline on Friday. Greece is trying to secure additional debt relief ahead of the first of four debt payments due to the IMF on Friday. Greece needs to repay the IMF nearly 1.6 billion euros ($1.75 billion) this month.
Brent oil prices will likely fall to between $40 and $50 a barrel by year's end, according to former OPEC head of research Hasan Qabazard. Those comments were made ahead of Friday's OPEC meeting in which members are expected to keep production levels at record highs. West Texas Intermediate crude was down 1.6% to $58.69 a barrel.
Rite Aid (RAD) shares were lower despite a 2.1% gain in same-store sales in May. Total drugstore sales were up 2% to $2.53 billion and pharmacy same-store sales increased 3%.
Opko Health (OPK) fell more than 7% after announcing it will acquire Bio-Reference Laboratories (BRLI) for $52.58 a share or around $1.47 billion. The all-stock deal will see Bio-Reference shareholders receive 2.75 shares of Opko for every share they hold.
Joy Global (JOY) was flat after beating analysts' estimates on its top- and bottom-lines. The company earned 59 cents a share, 4 cents higher than expected, though revenue fell 12.8% as demand for mining equipment declined.
Costco (COST) shares dropped nearly 1% after the warehouse retailer reported flat comparable-store sales in May. Comparable sales climbed 2% in the U.S., while international sales fell 4% due to the effects of gas prices and currency headwinds.J.M. Smucker ( SJM) shares were down 3.4% after the company reported a mixed quarter. Net income of 98 cents a share narrowly missed estimates, while revenue of $1.44 billion surged 17.1% from a year earlier. Sales saw a big boost due to its fourth-quarter acquisition of pet foods brand Big Heart.