MARKET SNAPSHOT: U.S. Stocks Slip As Oil Slides, Greek Debt Drama Escalates

By Anora Mahmudova and Sara Sjolin, MarketWatch

Energy stocks sell off as oil drops sharply

NEW YORK (MarketWatch) -- U.S. stocks wallowed in negative territory on Thursday as investors remained cautious in the wake of a renewed oil slump and uncertainty around the Greece debt negotiations.

The impasse between Greece and is creditors continued, after Germany rejected Greece's request for a six-month loan extension agreement. The full Eurogroup of eurozone finance ministers is scheduled to meet again on Friday.

'Germany's gone too far': Rejection of Greek debt plan draws quick Twitter reaction

Economic data on Thursday was mixed. Weekly jobless claims report was better than expected. Meanwhile, leading U.S. economic indicators edged up in January but the index pointed to some moderation in growth. Philadelphia Fed index disappointed, pointing the economy might have hit a soft patch.

The S&P 500 (SPX) moved lower, with six of its main sectors trading in the red. Energy stocks were hit hard after a renewed slide in oil prices.

The Dow Jones Industrial Average (DJI) dropped 100 points in early trade, though recovered some of the losses. 25 of its 30 members were trading lower. Wal-Mart Stores (WMT) , Chevron Corp (CVX) and Exxon Mobil (XOM) were leading losses, all down more than 2%.

The Nasdaq Composite (RIXF) edged higher.

Kim Forrest, senior investment strategist at Fort Pitt Capital, said the oil price appreciation over the past few weeks was unwarranted.

"There were no fundamental reasons for oil to recover from $43 to $53 a barrel, so I would argue that that was due to short-covering trades. So, when investors realize that there is a lot of oil stored, prices got hit again," Forrest said.

"Weak opening on Wall Street is not surprising, as we have been getting a lot of weak data, despite strong unemployment figures. But as interest rates and inflation keep falling, multiples keep rising," she said.

Forrest also cautioned that disinflation, which is primarily due to oil plunge, is temporary.

"Just as disinflation is temporary, multiple expansion is temporary and when stocks get too expensive they have a tendency to drop dramatically," she said.

Data: The number of people who applied for new unemployment benefits in the second week of February dropped back below the key 300,000 mark, offering fresh evidence that layoffs remain low and the pace of hiring in the U.S. is still robust. Solid data did little to lift the spirits on Wall Street, however.

The Philadelphia Fed's manufacturing index slowed to a reading of 5.2 in February, the lowest level in a year. The reading was below the 6.3 in January and the 8.0 forecast in a MarketWatch-compiled economist poll.

Leading U.S. economic indicators edged up 0.2% in January but the index pointed to some moderation in growth, according to the Conference Board

Oil blues: Energy companies and oil-related funds were hit hard, as crude-oil prices (CLH5) slid 4.7% and hovered around $50 a barrel. The oil slump came after reports showed a whopping jump in U.S. oil stockpiles, which underscored concerns of a supply glut. Among oil-tracking indexes, the iPath Goldman Sachs Crude Oil Total Return Index ETN (OIL) fell 4.5%, and the Velocity Shares 3X Long Crude ETN (UWTI) slumped 11%.

Earnings:T-Mobile US Inc.(TMUS) said it swung to a profit in the fourth quarter and reported a better-than-expected surge in revenue. Shares rose sharply.

Hormel Foods Corp.(HRL) beat Wall Street's earnings expectations and raised its 2015 adjusted earnings guidance. Shares rose 0.9%.

Wal-Mart Stores Inc.(WMT) reported quarterly earnings that missed Wall Street's expectations as it also laid out a plan to lift employee wages. Shares fell 1.1%.

Priceline Group Inc.(PCLN) shares popped 7.5% after profit and sales beat expectations.

SolarCity Corp.(SCTY) slumped 7.8% after the solar-energy firm late Wednesday said it swung to a fourth-quarter loss of 4 cents a share, from a profit of 28 cents a share a year ago.

BJ's Restaurants Inc.(BJRI) surged 10% after reporting a sharp rise in profit for the fourth quarter.

For more on notable movers, read our Movers & Shakers column.

Other markets: In Asia, Japanese stocks rose to a 15-year intraday high, while the rest of Asia closed mixed. Chinese markets were closed for the Lunar New Year celebrations.

Gold rallied (GCJ5) after the Federal Open Market Committee minutes dashed hopes of a midyear rate hike.

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