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[BENGALURU] US stocks opened little changed on Thursday as oil prices remained near multi-month lows, undermining efforts by major producers to stabilize the market.
US crude traded up 0.45 per cent at US$42.71 per barrel. They closed down 1.6 per cent on Wednesday after touching their lowest level since August. Global benchmark Brent was 0.83 per cent higher at US$45.19.
Since peaking in late February, crude has dropped around 20 per cent, skidding into bear market territory, despite Opec-led efforts to stabilise the market.
"Oil is trying to balance, but I'm worried that it would continue to head lower," said Aaron Clark, portfolio manager at GW&K Investment Management. "I think this a situation where Opec is ceding market share and is no longer able to control prices." The S&P energy index, which has lost 14.9 per cent this year, is the worst performing sector, largely underperforming the broader S&P 500 index.
At 9:37am ET (1337 GMT), the Dow Jones Industrial Average was down 6.32 points, or 0.03 per cent, at 21,403.71, the S&P 500 was down 1.63 points, or 0.07 per cent, at 2,433.98 and the Nasdaq Composite index was down 3.89 points, or 0.06 per cent, at 6,230.06.
Investors are concerned that the drop in oil prices could affect inflation. Inflation remains stubbornly below the Federal Reserve's 2 per cent target, even as the central bank adopts a hawkish tone regarding future rate hikes.
"I've been more worried about deflation. I know (the Fed) wants to normalise, but I think it would be tough to get one more this year and three next year in the face of a flattening yield curve," added Mr Clark.
A flattening yield curve is often interpreted as a negative economic indicator as it shows concerns about the future pace of growth and inflation, because buyers of long-dated debt would demand higher yields if they expected higher costs.
The yield spread between five-year Treasury notes and 30-year Treasury bonds flattened to its narrowest level since December 2007.
Economic data on Thursday showed jobless claims for last increased by 3,000 to 241,000, but remain at levels consistent with a tight labor market.
The healthcare index was the biggest gainer among the 11 major S&P sectors with a 0.43 per cent rise.
Among stocks, Accenture was off 4 per cent after the consulting and outsourcing services provider trimmed its annual revenue forecast.
Oracle's shares were up about 10 per cent as the business software maker forecast an upbeat current-quarter profit, prompting brokerages to raise price targets.
American Airlines was up 3 per cent at US$49.93 after the US airline said Qatar Airways had expressed interest in buying a 10 per cent stake.
The news lifted shares of other major US airlines such as Delta Air Lines, United Continental and Southwest Airlines, which were up about 1 per cent.
Advancing issues outnumbered decliners on the NYSE by 1,444 to 1,046. On the Nasdaq, 1,284 issues rose and 915 fell.