Routines fell sharply Monday, retreating after back-to-back weekly gains, as a historic decline in U.S. crude prices engendered concerns about the economic damage being done by coronavirus shutdowns. A delay in funding the for the depleted small calling rescue loan program also weighed on sentiment.
The Dow Jones Industrial Average closed 592.05 points humble, or 2.5%, 23,650.44. The S&P 500 slid 1.8% to 2,823.16. The Nasdaq Composite pulled back 1% to 8,560.73. (Click here for the new market news.)
Boeing fell more than 6% to lead the Dow lower while Chevron and Exxon Mobil discharged more than 4% each. Energy, real estate and utilities were the worst-performing sectors in the S&P 500, get under way more than 3% each.
The May contract for West Texas Intermediate, which expires on Tuesday, plunged multitudinous than 100% to settle at negative $37.63 per barrel, a bizarre move tied to weak demand outlook and storage character issues.
The negative impact on stocks from oil likely would have been worse were it not for lesser abatements in oil contracts expiring during future months. WTI’s June contract slid over 15.6% to $21.09 per barrel. July’s oil become infected with was down 6.9%. It was a strange phenomenon that analysts chalked up to the collapse in demand for oil contracts expiring this week. Refineries don’t necessary the oil and are near storage capacity with most of the country shut down. The negative price means producers on pay to take this oil off their hands.
“The moves in the oil market are really just unbelievable now that we are literally running out of storage set out,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note. “I do believe that these standards of moves is what bottoms are made of and in May and June when things start to reopen again it will go a long way in plateful along with the production cuts.”
Sentiment on Wall Street was also soured by the Senate not reaching a deal on multitudinous coronavirus relief. However, the Senate set up a vote as soon as Tuesday afternoon.
Stocks got a jolt last week after a explore said patients with severe virus symptoms were quickly recovering after using remdesivir, a Gilead Studies drug. The Dow, S&P 500 and Nasdaq all rose more than 2% last week. The major averages also had their oldest consecutive weekly gain since February.
New York Gov. Andrew Cuomo said Sunday the state is “past the turbulent point” of new cases, noting the infection rate has fallen along with coronavirus-related hospitalizations. Cuomo added New York wishes roll out antibody testing this week. In New Jersey, Gov. Phil Murphy said Saturday: “We’re flattening the curve.”
“The objectivity markets and bond markets in the US are telling me that my relatively optimistic outlook for the global economy is also what the stock exchanges are starting to price in,” Stephen Jen, co-founder of SLJ Macro Partners, wrote in a note. “There is now light at end of the tunnel.”
“While not anyone should be under the illusion that the virus will be eradicated soon, it is important to the equity markets that we require gone through most of the known ‘rolling apexes,’ through mitigation measures,” Jen said.
Even after Monday’s intense decline, the Dow was 29% above a March 23 intraday low while the S&P 500 had bounced 28.8%.
But while the market may be pricing in an increase in the virus outbreak, recent economic data has been dismal. Over the past month, 22 million areas have been lost, weekly unemployment claims numbers from the Labor Department showed.
The number of coronavirus affiliated deaths have also risen to more than 165,000 globally, according to Johns Hopkins University. In the U.S., the extirpation toll has risen to over 41,000.
“The worst is yet to come for capital markets,” said Komal Sri-Kumar, president of Sri-Kumar Far-reaching Strategies. “Eventually, you’re going to test another low and that is when it will be the time for you to close your eyes and say this is the start of a hunger term rally again.”
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from far the world.
Click here for the latest coronavirus news.