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| Stocks Slump as Oil Prices Nosedive: Live Markets Updates | Stocks Slump as Oil Prices Nosedive: Live Markets Updates |
| (about 1 hour later) | |
| Oil prices fell sharply on Monday on growing concerns that oil storage tanks in the United States, especially in the crucial site of Cushing, Okla., are not far from their limits. | |
| The price of the main U.S. benchmark, West Texas Intermediate, plummeted by almost 40 percent on Monday to under $11 a barrel. | |
| Under futures contracts, West Texas Intermediate is delivered to Cushing but investors are worried that there will be no place to put it there. | |
| “Cushing inventories continue to increase at record-high rates and are expected to hit tank tops in May,” said Hillary Stevenson, director, oil markets, at Genscape a market intelligence firm. | |
| Analysts said the price was also being hit because the current futures trading contract, which is used to set the trading price for oil, will expire on Tuesday and so investors have little interest in buying it. The next futures contract for West Texas Intermediate — the June contract — was trading considerably higher. | |
| Broader worries also growing that the deal reached on April 12 between the Organization of the Petroleum Exporting Countries, Russia and other producers will not be sufficient to prevent the oil markets being overwhelmed with a record surge of surplus oil. With much of the world in lockdown because of the coronavirus pandemic, global demand for oil has collapsed, leading to record surpluses. | |
| The numbers explain why the markets are worried. Under the terms of the arrangement brokered by President Trump, Saudi Arabia, Russia and other countries to cut will cut 9.7 million barrels a day in production, beginning in May. Analysts forecast that oil consumption in April will fall by about three times that. | |
| “It is not enough” to avoid inventories rapidly building up, said Bjornar Tornhaugen, head of oil markets at Rystad Energy, a consulting firm. | |
| On Monday, Halliburton, which provides equipment and services to energy companies, gave an early indication of the damage being sustained by the industry when it reported a $1 billion loss in the first quarter compared with net income of $152 million in the same period a year earlier. | |
| Oil companies will either have to turn the taps off or see storage rise to tank-busting levels. David Fyfe, chief economist at Argus Media, a commodities pricing firm, expects tank farms around the globe to fill to the brim by the middle of May. | |
| Shake Shack, the fast-food chain, said on Sunday it was returning a $10 million loan from a federal program to help small businesses, following criticism that the stimulus program had favored large chains. | Shake Shack, the fast-food chain, said on Sunday it was returning a $10 million loan from a federal program to help small businesses, following criticism that the stimulus program had favored large chains. |
| The $349 billion stimulus effort, which was distributed on a first-come, first-serve basis, was exhausted in just two weeks, with many loans favoring larger companies that were better able to navigate the application process. | The $349 billion stimulus effort, which was distributed on a first-come, first-serve basis, was exhausted in just two weeks, with many loans favoring larger companies that were better able to navigate the application process. |
| The Paycheck Protection Program loans from the Small Business Administration will be forgiven for companies that do not lay off staff or that rehire them by June 30. | The Paycheck Protection Program loans from the Small Business Administration will be forgiven for companies that do not lay off staff or that rehire them by June 30. |
| Shake Shack, with 189 outlets and nearly 8,000 employees in the United States, said it had secured the additional capital it needed through an equity transaction on Friday. | Shake Shack, with 189 outlets and nearly 8,000 employees in the United States, said it had secured the additional capital it needed through an equity transaction on Friday. |
| “We’re thankful for that, and we’ve decided to immediately return the entire $10 million P.P.P. loan we received last week to the S.B.A. so that those restaurants who need it most can get it,” the company said in a statement from Danny Meyer, the chairman of Shake Shack, and Randy Garutti, its chief executive. | “We’re thankful for that, and we’ve decided to immediately return the entire $10 million P.P.P. loan we received last week to the S.B.A. so that those restaurants who need it most can get it,” the company said in a statement from Danny Meyer, the chairman of Shake Shack, and Randy Garutti, its chief executive. |
| The company said the loan program should be fully funded in order to not pit restaurants against one another. It called for scrapping the June forgiveness date in favor of staggered deadlines to reflect how the epidemic has hit different parts of the country at different times. | The company said the loan program should be fully funded in order to not pit restaurants against one another. It called for scrapping the June forgiveness date in favor of staggered deadlines to reflect how the epidemic has hit different parts of the country at different times. |
| On Monday, Congress and the Trump administration were moving toward a deal to replenish funds for the P.P.P. program. The $450 billion spending deal being discussed would also provide additional funds for hospitals and testing. | |
| But lawmakers and the administration have struggled to break an impasse over the funds, after Democrats insisted on coupling the infusion to the program with other provisions to counter the impact of the pandemic. | |
| Treasury Secretary Steven Mnuchin gave broad outlines of a final package in an interview on CNN on Sunday: $300 billion to replenish the P.P.P.; $50 billion for the Small Business Administration’s disaster relief fund; $75 billion for hospitals and $25 billion for testing. | |
| Sir Richard Branson pleaded publicly with the British government on Monday for taxpayer support of his Virgin Airlines, and even suggested that he would put up his private Caribbean island as collateral. | |
| In a blog post, Mr. Branson noted that Virgin Atlantic employees had already agreed to reduce their wages for eight weeks, but added that the airline would need help from the British taxpayers. “Without it, there won’t be any competition left and hundreds of thousands more jobs will be lost, along with critical connectivity and huge economic value,” he wrote. | In a blog post, Mr. Branson noted that Virgin Atlantic employees had already agreed to reduce their wages for eight weeks, but added that the airline would need help from the British taxpayers. “Without it, there won’t be any competition left and hundreds of thousands more jobs will be lost, along with critical connectivity and huge economic value,” he wrote. |
| The plea came days after The Financial Times reported that government officials had told Virgin Atlantic to resubmit its request for a package of commercial loans and guarantees worth 500 million pounds, or $622 million. The newspaper added that the government was concerned the carrier had not exhausted other fund-raising options before asking for public support. | The plea came days after The Financial Times reported that government officials had told Virgin Atlantic to resubmit its request for a package of commercial loans and guarantees worth 500 million pounds, or $622 million. The newspaper added that the government was concerned the carrier had not exhausted other fund-raising options before asking for public support. |
| The post was also published after critics noted that Mr. Branson’s personal net worth is about $4.4 billion, and that his primary residence is Necker Island in the British Virgin Islands, long known for its low tax rates. But Mr. Branson argued that his net worth is tied up in his ownership of Virgin companies, instead of cash in a bank account. | The post was also published after critics noted that Mr. Branson’s personal net worth is about $4.4 billion, and that his primary residence is Necker Island in the British Virgin Islands, long known for its low tax rates. But Mr. Branson argued that his net worth is tied up in his ownership of Virgin companies, instead of cash in a bank account. |
| United Airlines lost more than $2 billion in the first quarter, a decline driven by the virtual stalling of the global airline industry in March, the company said in a securities filing on Monday. | United Airlines lost more than $2 billion in the first quarter, a decline driven by the virtual stalling of the global airline industry in March, the company said in a securities filing on Monday. |
| The carrier said that it expected to receive access to a $4.5 billion loan from the Treasury Department under the economic relief law passed several weeks ago. United had already received about $5 billion from the federal government, mostly in grants intended to pay employees through September. | The carrier said that it expected to receive access to a $4.5 billion loan from the Treasury Department under the economic relief law passed several weeks ago. United had already received about $5 billion from the federal government, mostly in grants intended to pay employees through September. |
| If United decides to draw down the loan, in exchange it will have to provide the Treasury with warrants giving it the right to buy stock in the company, as it already did for a portion of the funds to pay workers. The new warrants would allow the government buy a $450 million chunk of United, or 14.2 million shares at a price of $31.50 each. | If United decides to draw down the loan, in exchange it will have to provide the Treasury with warrants giving it the right to buy stock in the company, as it already did for a portion of the funds to pay workers. The new warrants would allow the government buy a $450 million chunk of United, or 14.2 million shares at a price of $31.50 each. |
| In the first quarter, United earned $8 billion in revenue, a 17 percent decline from last year. The carrier also said it had $6.3 billion in cash on hand, including about $2 billion in undrawn credit. | In the first quarter, United earned $8 billion in revenue, a 17 percent decline from last year. The carrier also said it had $6.3 billion in cash on hand, including about $2 billion in undrawn credit. |
| The airline has cut its schedule by 80 percent in April and expects to cut it by 90 percent in May and June. | The airline has cut its schedule by 80 percent in April and expects to cut it by 90 percent in May and June. |
| The National Restaurant Association on Monday asked congressional leaders to create a recovery fund for the restaurant industry, which has been upended by the coronavirus pandemic. | |
| In the letter, the trade association said that 8 million restaurant employees have been laid off or furloughed and that the industry has lost $30 billion since March, with another $50 billion expected to disappear by the end of April. | |
| “The restaurant industry has been the hardest hit by the coronavirus mandates — suffering more sales and job losses than any other industry in the country,” the letter said. “For an industry with sales that exceed the agriculture, airline, railroad, ground transportation, and spectator sports industries combined, a restaurant relief and recovery program is desperately needed.” | |
| Stocks on Wall Street tumbled, with shares of energy producers following the price of crude oil lower on Monday. | Stocks on Wall Street tumbled, with shares of energy producers following the price of crude oil lower on Monday. |
| The S&P 500 fell more than 1 percent in early trading, and shares in Europe were also mostly lower. | The S&P 500 fell more than 1 percent in early trading, and shares in Europe were also mostly lower. |
| Oil producers, including Noble Energy and Diamondback Energy, were among the worst performing shares in the S&P 500. Shares of United Airlines and American Airlines were also sharply lower after the former said that it lost almost $2 billion in the first three months of the year. | Oil producers, including Noble Energy and Diamondback Energy, were among the worst performing shares in the S&P 500. Shares of United Airlines and American Airlines were also sharply lower after the former said that it lost almost $2 billion in the first three months of the year. |
| As investors try to gauge the extent of the damage caused by the coronavirus pandemic, they’ll face a flood of updates this week from big companies, with about one-fifth of the S&P 500 expected to report first-quarter profits. | As investors try to gauge the extent of the damage caused by the coronavirus pandemic, they’ll face a flood of updates this week from big companies, with about one-fifth of the S&P 500 expected to report first-quarter profits. |
| Monday’s losses may have been tempered somewhat by progress on the response to the pandemic. Lawmakers in Washington said they were nearing a deal for a new support package for small businesses, and President Trump said the authorities would step up testing. But protests in some states against the lockdowns underscored the economic damage that many households are suffering, in the United States and around the world. | Monday’s losses may have been tempered somewhat by progress on the response to the pandemic. Lawmakers in Washington said they were nearing a deal for a new support package for small businesses, and President Trump said the authorities would step up testing. But protests in some states against the lockdowns underscored the economic damage that many households are suffering, in the United States and around the world. |
| Global stock markets have been rebounding since late March, as investors have routinely looked past evidence of the damage caused by stay-at-home orders and business shutdowns, and instead focused on hopes for an eventual recovery. | Global stock markets have been rebounding since late March, as investors have routinely looked past evidence of the damage caused by stay-at-home orders and business shutdowns, and instead focused on hopes for an eventual recovery. |
| Millions of people are wondering about refunds from airlines, concert venues and learning institutions. For the 22 million people who have filed for unemployment benefits, it is probably a simple matter: You take absolutely everything back that you possibly can. Ditto for those who face a large imminent decline in income. | Millions of people are wondering about refunds from airlines, concert venues and learning institutions. For the 22 million people who have filed for unemployment benefits, it is probably a simple matter: You take absolutely everything back that you possibly can. Ditto for those who face a large imminent decline in income. |
| But for consumers who are not yet desperate, it quickly gets complicated. | But for consumers who are not yet desperate, it quickly gets complicated. |
| Some companies that already have your money are not very sympathetic. Take airlines: Some of the large carriers are of strategic importance to the economy, and this week they received their bailout. Yet even as they knew that they would almost certainly get their hands on our tax money, many held customers’ money hostage. | Some companies that already have your money are not very sympathetic. Take airlines: Some of the large carriers are of strategic importance to the economy, and this week they received their bailout. Yet even as they knew that they would almost certainly get their hands on our tax money, many held customers’ money hostage. |
| Ticketmaster put itself back in consumers’ cross hairs by making it look like they could get their money back only if shows were canceled instead of postponed. The company now says that it was all a big misunderstanding and that most people can get their money in a month or two. | Ticketmaster put itself back in consumers’ cross hairs by making it look like they could get their money back only if shows were canceled instead of postponed. The company now says that it was all a big misunderstanding and that most people can get their money in a month or two. |
| Vrbo, which relies equally on the hosts who make properties available and the guests who rent them, split things down the middle, asking guests to accept as little as 50 percent back from hosts, if they could not find alternate dates. | Vrbo, which relies equally on the hosts who make properties available and the guests who rent them, split things down the middle, asking guests to accept as little as 50 percent back from hosts, if they could not find alternate dates. |
| Every refund request means weighing your household’s economic uncertainty against the perhaps equally precarious status of any given person or place that has your money but can’t deliver on all its promises. There is no rule book for these decisions. | Every refund request means weighing your household’s economic uncertainty against the perhaps equally precarious status of any given person or place that has your money but can’t deliver on all its promises. There is no rule book for these decisions. |
| The Australian government said on Monday that Google and Facebook would have to pay media outlets for news content in the country, part of an emerging global effort to rescue local publishers by moving to compel tech giants to share their advertising revenue. | The Australian government said on Monday that Google and Facebook would have to pay media outlets for news content in the country, part of an emerging global effort to rescue local publishers by moving to compel tech giants to share their advertising revenue. |
| The British government announced on Monday a $1.55 billion bailout package for the country’s start-ups, in an effort to help keep afloat young, often-unprofitable tech companies that have been hit by the economic fallout of the coronavirus. Britain said £500 million would be available through the “Future Fund” to invest in high-growth start-ups if the companies can find matching funds. | The British government announced on Monday a $1.55 billion bailout package for the country’s start-ups, in an effort to help keep afloat young, often-unprofitable tech companies that have been hit by the economic fallout of the coronavirus. Britain said £500 million would be available through the “Future Fund” to invest in high-growth start-ups if the companies can find matching funds. |
| Reporting was contributed by Michael de la Merced, David Yaffe-Bellany, Niraj Chokshi, Carlos Tejada, Austin Ramzy, Adam Satariano, Ron Lieber, Ben Casselman, Jim Tankersley and Kevin Granville. |