S&P 500 Risks Stall, Suffering From Oil Market's Drag

Stocks were on track for a third day in the red as traders come to terms with an indecisive Federal Reserve and the continued slump in oil prices—now near $40 a barrel and at their lowest in over six years. Energy shares, a big bloc in the S&P 500 (SPX), were lower in early action Thursday. Chinese shares fell overnight, while European equities were awash in red. The U.S. dollar traded mixed against the majors.

As for the SPX, an open near the bottom end of the recent trading range, near 2065, looks likely and will become an important line to hold for bulls.

Fed: Mixed Message? Little sign of an aggressive Federal Reserve in July meeting minutes and yet Wall Street collectively slumped. Is the Street just tired of it, begging the Fed to just do something already and let us trade on? Fed minutes suggested that a September interest rate increase was still on the table. Maybe? Those July notes also revealed several Fed voters feel inflation may still be too low to take policy action. Federal Reserve Bank of San Francisco President John Williams warned in a speech in Jakarta against using interest rates as a tool to tame rising house prices. His comments follow the release of a benign consumer price index (CPI) report on Wednesday that did include a flare in shelter prices.

Jobless Claims: Fourth Straight Rise. The number of people who applied for unemployment benefits in mid-August rose for the fourth straight week. That’s not a good sign for anyone cheering on the U.S. economy. But it’s important to view the number in context. Initial claims have clung below the key 300,000 threshold for 24 weeks, the longest stretch in more than 15 years, government data shows.

Crude Supplies Still Build. The U.S.-traded crude oil benchmark moved closer to the $40 a barrel mark after a 4.3% dive in yesterday’s session and lower action early Thursday. U.S. oil prices in particular are under pressure after a surprise 2.6 million-barrel increase in U.S. commercial crude stocks last week on the back of higher imports on the Gulf Coast, MarketWatch reports.

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