Stocks close lower, as oil contract turns negative
20-Apr-20 16:15 ET
Dow -592.05 at 23650.44, Nasdaq -89.41 at 8560.74, S&P -51.40 at 2823.16
briefing.com
[BRIEFING.COM] The S&P 500 declined 1.8% on Monday, although that was relatively modest given the implosion in the oil market where the expiring May contract for WTI crude closed negative for the first time ever. The Dow Jones Industrial Average declined 2.4%, the Nasdaq Composite declined 1.0%, and the Russell 2000 declined 1.3%.
Specifically, WTI crude futures for May delivery collapsed 306%, or $55.83, to -$37.63/bbl ahead of tomorrow's expiration, as no one presumably wanted to take physical delivery given the well-documented storage constraints and lack of demand. The negative price also indicated that producers are paying someone to take their oil.
The historic, and mind-boggling, occurrence appeared to spoil an intraday rebound in stocks, which started to accelerate losses heading into the futures settlement time at 2:30 p.m. ET. Around that same time, it was also reported that a vote to replenish the small business loan program was delayed in the Senate due to ongoing negotiations.
All 11 S&P 500 sectors closed in negative territory, near session lows, with the energy (-3.2%), real estate (-3.7%), and utilities (-3.9%) sectors leading the retreat. The health care (-0.8%) and communication services (-0.9%) sectors declined less than 1%.
It should be noted, though, that the WTI futures curve did show escalating prices amid expectations that prices should rebound with production cuts and hopefully increased demand. For instance, the June WTI crude futures contract settled at $20.30/bbl, although that was still an 18.9% decline.
Back to stocks, Walt Disney (DIS 102.26, -4.37, -4.1%) and Boeing (BA 143.61, -10.39, -6.8%) underperformed the broader market following a pair of analyst downgrades and negative-sounding reports. Disney is reportedly suspending pay for 100,000 employees, while a GE leasing subsidiary canceled 69 orders of Boeing's 737 MAX.
U.S. Treasuries finished mixed with longer-dated maturities continuing to show relative strength. The 2-yr yield increased one basis point to 0.21%, while the 10-yr yield declined three basis points to 0.63%. The U.S. Dollar Index increased 0.2% to 99.98.
Investors did not receive any economic data on Monday. Looking ahead, investors will receive Existing Home Sales for March on Tuesday.
- Nasdaq Composite -4.6% YTD
- S&P 500 -12.6% YTD
- Dow Jones Industrial Average -17.1% YTD
- Russell 2000 -27.3% YTD
Market Snapshot
| Dow | 23650.44 | -592.05 | (-2.44%) | | Nasdaq | 8560.74 | -89.41 | (-1.03%) | | SP 500 | 2823.16 | -51.40 | (-1.79%) | | 10-yr Note | +2/32 | 0.628 |
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| | NYSE | Adv 675 | Dec 2242 | Vol 1.1 bln | | Nasdaq | Adv 1252 | Dec 2004 | Vol 3.7 bln |
Industry Watch
| Strong: Health Care, Communication Services |
| | Weak: Energy, Real Estate, Utilities |
Moving the Market
-- Stocks close lower as oil contract turns negative
-- WTI crude contract for May collapses to -$37.63/bbl; prices show rebound in later contracts
-- Vote on small business funding delayed in Senate
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WTI crude closes at negative $37 in historic session
20-Apr-20 15:30 ET
Dow -580.12 at 23662.37, Nasdaq -74.70 at 8575.45, S&P -49.74 at 2824.82
[BRIEFING.COM] The S&P 500 and Russell 2000 both trade lower by 1.7%.
Oil tanker companies like Frontline (FRO 10.89, +1.29, +13.7%) are showing strength after the negative print in oil prices today, as producers are essentially paying companies to take their oil.
WTI crude for May delivery plunged 306.0% (-$55.83) to -$37.63/bbl, while the June contract fell 18.9% to $20.30/bbl.
Halliburton bucks energy decline after earnings report
20-Apr-20 15:00 ET
Dow -526.60 at 23715.89, Nasdaq -60.39 at 8589.76, S&P -45.66 at 2828.90
[BRIEFING.COM] The S&P 500 is down back at session lows with a 1.6% decline.
All sectors are currently negative with the energy sector (-3.9%) surpassing the utilities sector (-3.7%) at the bottom of the standings. Halliburton (HAL 7.60, +0.03, +0.3%) bucks the energy trend following its earnings results.
Looking ahead in earnings, IBM (IBM 121.03, +0.90, +0.7%) will report results after the close, while Coca-Cola (KO 47.44, -0.63, -1.3%) will report tomorrow morning. |
