The S&P 500 cracked the key 1,900 level Thursday, closing below it for the first since September. In a sell-off ignited by falling oil prices, the index shed 2.5 percent to 1,890.
Stock futures were slightly higher Thursday morning, but stock traders have their eye on 1,867, the S&P 500 low from August.
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"They want to test that and they want to test 1,820," said Peter Boockvar, market analyst at The Lindsey Group. A level of 1,820 was the intraday low in October 2014. But Boockvar said most important is which level holds and a failure there could easily take the S&P into the 1,700s.
But he did say the 89.6 percent down volume in NYSE operating companies' stocks Wednesday was a good sign, and that a day or two of that type of selling means a short-term bottom could be being reached.
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"Certainly panic is in the air. People are selling first and asking questions later. It kind of feels the same as it did in August. It's always bad when you're in the middle of it. Certainly, this has been very violent and very quick, and sometimes that's a good thing. It's like ripping the Band Aid off, said Paul LaRosa, technical analyst at Maxim Group.
LaRosa said 1,867 is his S&P support level, and his key support level on the Dow is 15,940. The Dow fell 2.2 percent to 16,151 on Wednesday. He said it's a negative sign for the market that rallies can't hold and selling picks up later in the day.
"What turns this around is it gets to a level where people say: 'Now I'm interested,'" he said, adding better corporate profits could be a catalyst.
Even though stocks slumped with oil, West Texas Intermediate crude closed 4 cents higher at $30.48 per barrel. But a government report of growing diesel and gasoline supplies erased an early 3 percent gain which had given a lift to futures.
Stocks benefitted from higher oil Thursday. WTI was up 1.1 percent at $30.82 per barrel in morning trading.
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Selling in stocks snowballed as traders speculated about hedge funds selling to meet redemptions and liquidations in the commodities space.
They were also watching the larger-than-expected $46 billion offering of Anheuser-Busch InBev debt which some say drew funds from equities.
The sell-off slammed biotech, and high fliers like Netflix and Amazon were among the hardest hit. "Everyone beat up on last year's winners. I think this is the unwinding of Fed froth," said Jack Ablin, CIO of BMO Private Bank.
Ablin said the sell-off is ultimately healthy for the market. "The market needs to drop another 10 percent. I'd rather invest in a market that's fairly priced and have some stability than tiptoe around in this frothy level and hope the Fed throws us a bone again," he said.
Other earnings include First Republic, Shaw Communications and Taiwan Semiconductor.
There are also weekly jobless claims and import prices at 8:30 a.m.ET.
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