COMMENTS traded below $42 per barrel for the first time since March 2009, leading the energy sector to trade as low as 1.35 percent. WTI futures settled down 2.5 percent.
“The negative effect of falling oil prices on stocks maybe has faded,” said Zachary Karabell, head of global strategy at Envestnet.
Subdued concerns over China devaluing its currency by 10 percent propped U.S. markets higher, said William Lynch, director of investments at Hinsdale Associates. “I think that’s in the rear-view mirror now,” he said.
“The last thing they want is spiraling devaluation, but at the same time they are standing by their word,” PBoC vice governor Yi Gang.
On Wednesday, U.S. equities whipsawed, dropping more than 1 percent at their lows before closing mostly higher. Stocks were largely weighed down by the People’s Bank of China’s decision to further weaken the yuan against the U.S. dollar.
Investors also digested a slew of economic data, as U.S. retail sales for July rose 0.6 percent, slightly above estimates, the Commerce Department said, boosted by auto sales. June’s retail sales were also revised up to show them unchanged instead of the previously reported 0.3 percent drop, Reuters said.
“When you take out auto sales, it really wasn’t [an increase],” said Maris Ogg, president at Tower Bridge Advisors. “We’ve had money coming into our pockets due to [lower] gasoline prices and we haven’t spent it.”
Ogg added the U.S. consumer has become more prudent since the recession and is only buying what he or she truly needs.
Weekly jobless claims came in at 274,000, slightly above a consensus estimate of 270,000, while import prices fell 0.9 percent amid lower oil costs and a strong dollar.
“Bottom line, the song remains the same as the pace of firing’s remain quiescent as employers hold tight to their qualified workers,” Peter Boockvar, chief market analyst at The Lindsey Group said in a note about the jobless claims number.
U.S. business inventories rose 0.8 percent in June, well above the estimated 0.3 percent rise.
Weekly natural gas inventories also rose by 65 billion cubic feet, the Energy Information Administration said.
This combination of data sets and current market conditions could in fact lead the Federal Reserve to normalize monetary policy, said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
“They seem eager to get on with it … and that’s got the market on edge,” Luschini said.
, stocks closed higher as investors kept an eye on the latest developments in China and the progress being made on Greece’s new bailout program.
In corporate news, retailer‘s reported quarterly results that missed Wall Street’s expectations, citing a delay in tax-free sales by a number of states.
Elon Musk’sfiled to offer 2.1 million common shares in an attempt to raise at least $500 million in new capital. The company’s stock traded higher before the bell.
, , and shares were all upgraded by BMO Capital Markets, Morgan Stanley, Cowen & Co. and Bernstein, respectively.
Thetraded 74 point higher, or 0.4 percent, at 17,477, with Cisco Systems leading advancers and and the greatest laggards.
The traded up 6 points, or 0.3 percent at 2,092 with consumer discretionary leading seven sectors higher and energy leading three sectors lower.
Thetraded up 21 points or 0.4 percent.
The U.S. 10-year yield was last up 6 basis points at about 2.19 percent.
Gold futures settled down 0.9 percent at $1,114.56 an ounce.
Decliners were about two steps ahead of advancers at the new York Stock Exchange, with an exchange volume of 428 million and a composite volume of 2.13 billion at 2:39 p.m.
The,widely considered the best gauge of fear in the market, traded near 13.
On tap this week:
Earnings: Nordstrom, El Pollo Loco, King Digital, Party City
1 p.m.: $16 billion 30-year bonds auction
4:30 p.m.: Fed balance sheet
8:30 a.m.: PPI
9:15 a.m.: Industrial production
10 a.m.: Consumer sentiment
More From CNBC.com: