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Wall Street tumbles as oil crash stirs pandemic fears

Stock Markets Apr 21, 2020 04:51PM ET
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© Reuters. The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City
 
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By Noel Randewich

(Reuters) - Wall Street tumbled for a second straight day on Tuesday as a collapse in U.S. oil prices and glum forecasts by companies worsened fears of a deep economic downturn.

All 11 S&P 500 sector indexes fell 1.6% or more, with energy (SPNY) sliding for the seventh time in eight sessions a day after the WTI contract (CLc1) crashed below zero as oil traders ran out of storage for May deliveries.

With the collapse spilling into June futures contracts, equity investors became wary of the extent of the economic damage from sweeping lockdown measures that have halted business activity and sparked millions of layoffs. [O/R]

The S&P information technology index (SPLRCT) slumped 4.1%, while the financial index (SPSY) dropped 3.2%. After many companies pulled their forecasts because of uncertainty related to the coronavirus, investors will focus in the coming days on first-quarter reports for signs of how badly the pandemic is hurting U.S. corporations.

The benchmark S&P 500 index (SPX) has climbed over 20% from its March low, powered by trillions of dollars in stimulus, but it remain nearly 20% below its February record high due to fears of devastating economic damage caused by the coronavirus.

“What you’re seeing is pulling back in the areas that have done well, and taking profits while you can,” said Quincy Krosby, a market strategist at Prudential Financial (NYSE:PRU) in Newark, New Jersey. “The question will be whether this is a consolidation after the market ran up so quickly, or is this the beginning of a more important pullback in the overall market?”

U.S. jobless claims hit 22 million in the past month as companies launched dramatic cost-saving measures to ride out the slump, and readings of U.S. business activity surveys, due on Thursday, are likely to plummet to recession-era lows.

Coca-Cola Co (N:KO) provided the latest evidence of the damage wrought by the global health crisis, saying its current-quarter results would take a severe hit from low demand for its soft drinks. Its stock fell 2.5%.

International Business Machines Corp (N:IBM) declined 3% after the company withdrew its 2020 annual forecast late on Monday.

In extended trade, Netflix (O:NFLX) surged 2.6% after the streaming video company reported more paid subscribers than expected in the first quarter.

Also after the bell, Texas Instruments (O:TXN) rose 3% following its quarterly report.

During Tuesday's session, the Dow Jones Industrial Average (DJI) fell 2.67% to end at 23,018.88 points, while the S&P 500 (SPX) lost 3.07% to 2,736.57.

The Nasdaq Composite (IXIC) dropped 3.48% to 8,263.23.

Declining issues outnumbered advancing ones on the NYSE by a 4.27-to-1 ratio; on Nasdaq, a 3.18-to-1 ratio favored decliners.

The S&P 500 posted one new 52-week high and no new lows; the Nasdaq Composite recorded 25 new highs and 34 new lows.

Volume on U.S. exchanges was 12.1 billion shares, compared with a 13.2 billion-share average for the full session over the last 20 trading days.

Wall Street tumbles as oil crash stirs pandemic fears
 

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Comments (15)
Fred Smith
Fred Smith Apr 21, 2020 5:20PM ET
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Oil should keep crashing hopefully another few months..
Yisroel David
Yisroel David Apr 21, 2020 5:14PM ET
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Can someone explain this to me? When companies revise estimates and such they seem to suffer, but whos surprised that companies are being hit? I would imagine it to be obvious that this will have tremendous negative effects across the board. The question is only how bad it will be.
Fred Smith
Fred Smith Apr 21, 2020 4:55PM ET
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Good news. Gas is now $1.05 in Cumberland, Virginia..keep dropping
Brian Kelly
Brian Kelly Apr 21, 2020 1:19PM ET
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good job Trump on driving the US economy into the group with your inability to deal with any situation that doesn't involve bullying someone
Alex Fernandez
Alex Fernandez Apr 21, 2020 12:56PM ET
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I just filled up my Prius with Jet fuel.
Jozay Alojos
Jozay Alojos Apr 21, 2020 12:35PM ET
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saudis just overloaded tankers with crude heading to US in a month!!
maga king
maga king Apr 21, 2020 12:12PM ET
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reopen!
Jiyook Ysng
Jiyook Ysng Apr 21, 2020 12:12PM ET
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you realy think that's gonna solve all the problems? the only reason market is not crushing right away is people actually believe it's going to be fine if we start working again. once they face the reality, who knows what's going to happen.
cho koh
cho koh Apr 21, 2020 11:18AM ET
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Time for the world to change to clean energy. Beautiful.
maga king
maga king Apr 21, 2020 11:18AM ET
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are you paying?
Rob Williams
Rob Williams Apr 21, 2020 8:51AM ET
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The Saudi’s and Russians dont want sub zero oil prices, but wall street wants thes wild swings, not hard to see the orchestration.
Sergio Perez
Fmaga Apr 21, 2020 8:47AM ET
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When there is no demand there should be no production.
trevor hron
trevor hron Apr 21, 2020 8:47AM ET
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If only it were that easy. This is not electricity we are talking about here. Cant flip a switch. Its a complicated process.
Paul Wall
Paul Wall Apr 21, 2020 8:47AM ET
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trevor hron if they stop it will damage the pumps.
 
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