By Abhiram Nandakumar
REUTERS - U.S. stock indexes dropped on Thursday morning, failing to hold on to a small rally at the open sparked by ECB President Mario Draghi's comments raising hopes of further easing monetary.
The European Central Bank kept its main rates on hold and Draghi said the central bank would "review and possibly reconsider" its monetary policy stance in March. Many analysts had not expected a rate cut before June.
Oil prices also sharply pared their losses after Draghi's comments, with Brent even edging higher, before turning back towards 12-year lows.
The comments come a day after a rout in global stocks, spurred by the relentless drop in oil prices and fears of a China-led slowdown in global growth.
A volatile session on Wall Street on Wednesday ended with the S&P 500 closing at its lowest since October 2014. The index has declined 9 percent this year.
Some investors, however, expect the market to stabilize as stock valuations are reassessed and buyers enter the field.
"This is a normal garden variety correction, with levels that set the playing field a little bit," said Philip Blancato, chief executive at Ladenberg Thalmann Asset Management in New York.
"The reality is that the energy sector continues to be a catalyst for concern. So for today's market, if oil gives us any modicum of stabilization, I think the overall market could be relatively flat to up today," he said.
At 9:54 a.m. ET (1454 GMT), the Dow Jones industrial average was down 33.07 points, or 0.21 percent, at 15,733.67.
The S&P 500 was down 6.3 points, or 0.34 percent, at 1,853.03.
The Nasdaq Composite index was down 25.85 points, or 0.58 percent, at 4,445.84.
Eight of the 10 major S&P sectors were lower, led by a 0.66 percent drop in the health sector, the only sector that ended higher on Wednesday.
Verizon shares rose 0.8 percent to $44.79 after the wireless carrier reported better-than-expected profit.
Union Pacific was down 6.7 percent at $68.71 after the railroad operator warned of a weak 2016. The stock was the biggest loser on the S&P 500.
Xilinx jumped 9.8 percent to $47.32 after the chipmaker's quarterly revenue beat expectations. The stock gave the second-biggest boost to the Nasdaq.
Data showed U.S. jobless claims rose unexpectedly to six-month highs last week, suggesting some loss of momentum in the labor market.
American Express, Starbucks and Schlumberger are slated to report after the close.
Declining issues outnumbered advancing ones on the NYSE by 1,671 to 1,111. On the Nasdaq, 1,536 issues fell and 809 rose.
The S&P 500 index showed no new 52-week highs and five new lows, while the Nasdaq recorded two new highs and 36 new lows.
(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Savio D'Souza)
