Stocks extended their modest drop by late morning Thursday after an increase in crude inventories wiped out most of the gains in oil prices.
The S&P 500 fell 0.5%, the Dow Jones Industrial Average was down 0.12%, and the Nasdaq fell 0.76%.
Crude oil erased earlier gains after weekly inventories showed an increase of 2.1 million barrels last week. Analysts had expected the Energy Information Administration data to show a decline of 1.4 million barrels. West Texas Intermediate crude oil edged 0.3% higher to $30.74 a barrel.
Stocks secured their first three-day winning streak of the year on Wednesday as concerns over oil, the U.S. economy and the Federal Reserve's rate-hike plans were all addressed in turn. The S&P 500 broke out of correction territory and is now down less than 10% from its 52-week high.
The labor market continued to show its strength on Thursday as weekly jobless claims fell to their lowest level since November. The number of new claims for unemployment benefits fell 7,000 to 262,000 in the past week. The four-week jobless claims average, a read that smooths out week-to-week fluctuations, slid 8,000 to 273,250.
Economic activity in the Philadelphia region improved in February, though remained in contraction. The Philadelphia Fed Index rose to negative 2.8 this month from a reading of negative 3.5 in January. New orders and the employment index were weaker.
Fed watchers got an unexpected bit of news Wednesday evening after St. Louis Fed President James Bullard said it would be "unwise" for the central bank to continue to raise rates in the face of inflation pressure and financial market volatility. The voting member of the Federal Open Market Committee had supported an earlier hike for much of last year.
IBM (IBM) was the best performer on the Dow, increasing nearly 6%, after agreeing to buy Truven Health Analytics for $2.6 billion. The acquisition strengthens IBM's health care portfolio, particularly its Watson Health business unit.
Coca-Cola (KO) inched higher after raising its quarterly dividend by 6% to 35 cents a share. The new annual dividend of $1.40 yields 3.2%. The new quarterly dividend will be payable April 1.
Walmart (WMT) fell 5% after disappointing quarterly sales. The world's largest retailer fell short of revenue estimates, generating $129.7 billion in its fourth quarter, down more than 1% and below consensus of $130.5 billion. Same-store sales rose 0.6%, though only two-thirds the growth rate expected. Wal-Mart also raised its annual dividend to $2 a share from $1.96.
Devon Energy (DVN) tumbled 6% after announcing a public share offering of 55 million shares. The energy company said it would put proceeds toward "general corporate purposes." Earlier this week, Devon Energy announced job cuts to 20% of its workforce.
Marvell Technology (MRVL) jumped 6% after settling a patent infringement lawsuit with Carnegie Mellon University. The case was settled for $750 million with no ongoing royalties. Carnegie Mellon University had been awarded $1.54 billion in 2012.