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Stocks Tumble as Oil’s Slide Continues: Live Markets Updates Stocks Tumble as Oil’s Slide Continues: Live Markets Updates
(32 minutes later)
Stocks on Wall Street fell for a second-straight day, as global markets retreated and oil prices continued their record slide.Stocks on Wall Street fell for a second-straight day, as global markets retreated and oil prices continued their record slide.
The S&P 500 dropped about 3 percent on Tuesday, its biggest daily decline in three weeks. Major European markets were 3 percent to 4 percent lower.The S&P 500 dropped about 3 percent on Tuesday, its biggest daily decline in three weeks. Major European markets were 3 percent to 4 percent lower.
The two-day slump is yet another shift in sentiment for the stock market as it searches for a clear path forward during the coronavirus crisis.The two-day slump is yet another shift in sentiment for the stock market as it searches for a clear path forward during the coronavirus crisis.
In recent weeks, the S&P 500 soared more than 25 percent, recovering roughly half its losses from a plunge in late February and early March. Investor spirits were lifted by a federal rescue package and promises by the Federal Reserve that it stood willing to pump trillions of dollars into the financial markets.In recent weeks, the S&P 500 soared more than 25 percent, recovering roughly half its losses from a plunge in late February and early March. Investor spirits were lifted by a federal rescue package and promises by the Federal Reserve that it stood willing to pump trillions of dollars into the financial markets.
Early signals that pace of growth in Covid-19 infections also buoyed the spirits of investors, suggesting the appearance of a dim light at the end of a tumultuous tunnel for the economy.Early signals that pace of growth in Covid-19 infections also buoyed the spirits of investors, suggesting the appearance of a dim light at the end of a tumultuous tunnel for the economy.
But periodically fresh evidence of the scale of the downturn — more than 20 million jobs have disappeared in the United States in four weeks — has pierced the bubble and returned investors focus to the sheer size of the recession.But periodically fresh evidence of the scale of the downturn — more than 20 million jobs have disappeared in the United States in four weeks — has pierced the bubble and returned investors focus to the sheer size of the recession.
The red flags have come in the form prominent forecasts about collapsing corporate earnings, or a contraction in G.D.P. that would have been unthinkable before the outbreak. (Goldman Sachs expects the economy to shrink at an annualized pace of 34 percent in the second quarter.)The red flags have come in the form prominent forecasts about collapsing corporate earnings, or a contraction in G.D.P. that would have been unthinkable before the outbreak. (Goldman Sachs expects the economy to shrink at an annualized pace of 34 percent in the second quarter.)
This week, it came from the oil markets, as the price of one oil benchmark dipped below zero for the first time, meaning some holders were ready to pay people to take a barrel off their hands.This week, it came from the oil markets, as the price of one oil benchmark dipped below zero for the first time, meaning some holders were ready to pay people to take a barrel off their hands.
“Every so often, reality bites,” said Steve Sosnick, chief strategist at Interactive Brokers in Greenwich, Conn. “You could not ignore what was going on in the oil markets.”“Every so often, reality bites,” said Steve Sosnick, chief strategist at Interactive Brokers in Greenwich, Conn. “You could not ignore what was going on in the oil markets.”
The unnerving inversion in oil prices reflected an economy in free-fall, disappearing demand for petroleum, and the fact that there are few places left to store all the crude still being pumped.The unnerving inversion in oil prices reflected an economy in free-fall, disappearing demand for petroleum, and the fact that there are few places left to store all the crude still being pumped.
On Tuesday the sell-off in oil continued, with the most closely watched price for oil in the United States, for a futures contract stipulating delivery of West Texas Intermediate crude in June, plunged to $11.69 a barrel, well away from negative territory but still down by nearly half. Brent crude, the global benchmark, also cratered.On Tuesday the sell-off in oil continued, with the most closely watched price for oil in the United States, for a futures contract stipulating delivery of West Texas Intermediate crude in June, plunged to $11.69 a barrel, well away from negative territory but still down by nearly half. Brent crude, the global benchmark, also cratered.
Shares of some oil producers, however, rose on Tuesday after President Trump said on Twitter that he was asking administration officials to “formulate a plan that will make funds available” to help the industry.Shares of some oil producers, however, rose on Tuesday after President Trump said on Twitter that he was asking administration officials to “formulate a plan that will make funds available” to help the industry.
Netflix reported first-quarter earnings on Tuesday that showed a surge in demand for the service with stay-at-home orders in place around the world.Netflix reported first-quarter earnings on Tuesday that showed a surge in demand for the service with stay-at-home orders in place around the world.
15.7 million new customers signed up in the first three months of the year. Before the pandemic, Netflix expected about seven million.15.7 million new customers signed up in the first three months of the year. Before the pandemic, Netflix expected about seven million.
Most of those, about 13.4 million, came from overseas. Netflix has more ground to gain across Europe, Asia and Latin America, where people are still discovering the service. For the United States and Canada, there were around 2.3 million new accounts.Most of those, about 13.4 million, came from overseas. Netflix has more ground to gain across Europe, Asia and Latin America, where people are still discovering the service. For the United States and Canada, there were around 2.3 million new accounts.
The company brought in about $5.8 billion in revenue and $709 million in profit. But with Hollywood shut down, the company has not been able to fill its pipeline with new content. The streaming service has plenty of films and shows in the can, but the slowdown will affect its lineup later in the year.The company brought in about $5.8 billion in revenue and $709 million in profit. But with Hollywood shut down, the company has not been able to fill its pipeline with new content. The streaming service has plenty of films and shows in the can, but the slowdown will affect its lineup later in the year.
A bust in the oil market worsened on Tuesday as traders were gripped by fear that crude output remains far too high and storage is quickly running out.A bust in the oil market worsened on Tuesday as traders were gripped by fear that crude output remains far too high and storage is quickly running out.
On Monday, the futures contract for West Texas Intermediate crude to be delivered in May, fell into negative territory — a bizarre move that has never before happened. In other words, some traders were willing to pay buyers to take oil off their hands.On Monday, the futures contract for West Texas Intermediate crude to be delivered in May, fell into negative territory — a bizarre move that has never before happened. In other words, some traders were willing to pay buyers to take oil off their hands.
But other benchmarks of the price of crude had remained much higher (closer to $20 per barrel), suggesting that the negative price was partly a result of how oil is traded, with different prices set for crude that will be delivered at different points in time.But other benchmarks of the price of crude had remained much higher (closer to $20 per barrel), suggesting that the negative price was partly a result of how oil is traded, with different prices set for crude that will be delivered at different points in time.
On Tuesday, the rest of the oil market also crashed. The West Texas Intermediate contract for June delivery fell 43 percent to $11.69 a barrel, and Brent crude, the international benchmark, was down about 21 percent.On Tuesday, the rest of the oil market also crashed. The West Texas Intermediate contract for June delivery fell 43 percent to $11.69 a barrel, and Brent crude, the international benchmark, was down about 21 percent.
Demand for oil is disappearing, and despite a deal by Saudi Arabia, Russia and other nations to cut production, the world is running out of places to put all the oil being pumped out — about 100 million barrels a day. At the start of the year, oil sold for more than $60 a barrel.Demand for oil is disappearing, and despite a deal by Saudi Arabia, Russia and other nations to cut production, the world is running out of places to put all the oil being pumped out — about 100 million barrels a day. At the start of the year, oil sold for more than $60 a barrel.
Refineries are unwilling to turn oil into gasoline, diesel and other products because so few people are commuting or taking airplane flights, and international trade has slowed sharply. Oil is already being stored on barges and in any nook and cranny companies can find. One of the better parts of the oil business these days is owning storage tankers.Refineries are unwilling to turn oil into gasoline, diesel and other products because so few people are commuting or taking airplane flights, and international trade has slowed sharply. Oil is already being stored on barges and in any nook and cranny companies can find. One of the better parts of the oil business these days is owning storage tankers.
“I’m just living a nightmare,” said Ben Sheppard, president of the Permian Basin Petroleum Association, which represents shale oil companies in the area of Texas and New Mexico that became the world’s largest oil field last year.“I’m just living a nightmare,” said Ben Sheppard, president of the Permian Basin Petroleum Association, which represents shale oil companies in the area of Texas and New Mexico that became the world’s largest oil field last year.
The sell-off in oil sharpened after the Texas Railroad Commission declined on Tuesday to force oil producers in the state to cut production. While one commissioner wanted to cut production by 20 percent, the other two members of the commission said they needed more legal advice before acting. The commission used to regularly manage oil production but hasn’t done so since the early 1970s.The sell-off in oil sharpened after the Texas Railroad Commission declined on Tuesday to force oil producers in the state to cut production. While one commissioner wanted to cut production by 20 percent, the other two members of the commission said they needed more legal advice before acting. The commission used to regularly manage oil production but hasn’t done so since the early 1970s.
On Tuesday, President Trump said on Twitter that he was asking administration officials to “formulate a plan that will make funds available” to help the oil and gas industry. He has previously asked Congress for $3 billion to purchase oil for the Strategic Petroleum Reserve but lawmakers did not include it in last month’s $2.2 trillion stimulus package.On Tuesday, President Trump said on Twitter that he was asking administration officials to “formulate a plan that will make funds available” to help the oil and gas industry. He has previously asked Congress for $3 billion to purchase oil for the Strategic Petroleum Reserve but lawmakers did not include it in last month’s $2.2 trillion stimulus package.
That historic plunge on Monday was exacerbated by a quirk in how the oil markets work. The negative price only concerned contracts for delivery of barrels in May that are traded on so-called futures markets. At the same time trading happens for May deliveries, people trade on contracts ending in June, July and so on.That historic plunge on Monday was exacerbated by a quirk in how the oil markets work. The negative price only concerned contracts for delivery of barrels in May that are traded on so-called futures markets. At the same time trading happens for May deliveries, people trade on contracts ending in June, July and so on.
Demand for oil has collapsed in recent weeks. Without a use for it, the world’s biggest producers are running out of places to store the crude that companies have continued to pump out of the ground.Demand for oil has collapsed in recent weeks. Without a use for it, the world’s biggest producers are running out of places to store the crude that companies have continued to pump out of the ground.
As a result, traders this week were willing to pay to get rid of oil rather than figure out how to keep storing it. The May contracts that fell so much end on Tuesday. (The price of the June contract is still in positive territory, though they have fallen a lot in recent weeks, too.)As a result, traders this week were willing to pay to get rid of oil rather than figure out how to keep storing it. The May contracts that fell so much end on Tuesday. (The price of the June contract is still in positive territory, though they have fallen a lot in recent weeks, too.)
A negative oil price has never happened before, and experts do not expect prices to stay negative for days or weeks. Demand for oil will likely remain tepid for months because few experts believe the economy will quickly rebound to where it was before the pandemic.A negative oil price has never happened before, and experts do not expect prices to stay negative for days or weeks. Demand for oil will likely remain tepid for months because few experts believe the economy will quickly rebound to where it was before the pandemic.
Employees at Charter Communications, the internet, cable TV and phone giant known as Spectrum, have been getting sick while adhering to a company policy that has required thousands of them to work in offices and call centers rather than from home.Employees at Charter Communications, the internet, cable TV and phone giant known as Spectrum, have been getting sick while adhering to a company policy that has required thousands of them to work in offices and call centers rather than from home.
More than 230 Spectrum employees have tested positive for Covid-19 since the pandemic hit the United States, according to a person with knowledge of the company who was not authorized to speak publicly. They have fallen ill at a time when some rank-and-file workers and managers have questioned how many Spectrum employees must work in offices and call centers.More than 230 Spectrum employees have tested positive for Covid-19 since the pandemic hit the United States, according to a person with knowledge of the company who was not authorized to speak publicly. They have fallen ill at a time when some rank-and-file workers and managers have questioned how many Spectrum employees must work in offices and call centers.
The New York attorney general’s office said on Monday that it had opened an inquiry into the company because of its handling of employees during the pandemic. Spectrum declined to comment on the inquiry.The New York attorney general’s office said on Monday that it had opened an inquiry into the company because of its handling of employees during the pandemic. Spectrum declined to comment on the inquiry.
The company has been deemed an essential service because it keeps its 29 million customers connected and allows people and businesses across the country to function remotely. Spectrum, based in Stamford, Conn., employs 95,000 people in 41 states. About 40,000 people work in call centers or offices; roughly 55,000 workers deal with customers face to face as field technicians or retail employees.The company has been deemed an essential service because it keeps its 29 million customers connected and allows people and businesses across the country to function remotely. Spectrum, based in Stamford, Conn., employs 95,000 people in 41 states. About 40,000 people work in call centers or offices; roughly 55,000 workers deal with customers face to face as field technicians or retail employees.
The foundations of two insurance companies, Cigna and New York Life, said on Tuesday they had agreed to contribute $25 million each to a new fund created to help the survivors of health care workers who have died during the coronavirus pandemic.The foundations of two insurance companies, Cigna and New York Life, said on Tuesday they had agreed to contribute $25 million each to a new fund created to help the survivors of health care workers who have died during the coronavirus pandemic.
The families of doctors, nurses, technicians, janitors, cafeteria workers and others who have died from coronavirus while working on the front lines of the epidemic will be eligible for grants up to $75,000 from the Brave Heart Fund, the companies said. It will begin accepting applications next month.The families of doctors, nurses, technicians, janitors, cafeteria workers and others who have died from coronavirus while working on the front lines of the epidemic will be eligible for grants up to $75,000 from the Brave Heart Fund, the companies said. It will begin accepting applications next month.
“We are looking to take care of these families,” said Ted Mathas, the chief executive of the New York Life.“We are looking to take care of these families,” said Ted Mathas, the chief executive of the New York Life.
Health care workers, ranging from the nurses checking on patients in the I.C.U. to the hospital cleaning staff, know they are at significant risk for contracting the virus. “They’re put in a position that nobody anticipated, the potential loss of life,” said David Cordani, Cigna’s chief executive.Health care workers, ranging from the nurses checking on patients in the I.C.U. to the hospital cleaning staff, know they are at significant risk for contracting the virus. “They’re put in a position that nobody anticipated, the potential loss of life,” said David Cordani, Cigna’s chief executive.
Cigna is also providing behavioral and emotional health support to the families through one of its units. “Many, many will be affected by the emotional strain,” Mr. Cordani said.Cigna is also providing behavioral and emotional health support to the families through one of its units. “Many, many will be affected by the emotional strain,” Mr. Cordani said.
The fund will also accept individual contributions. New York Life says it will match any individual contributions up to $25 million, and the companies also plan to solicit other corporations for donations.The fund will also accept individual contributions. New York Life says it will match any individual contributions up to $25 million, and the companies also plan to solicit other corporations for donations.
Snap, the maker of Snapchat, on Tuesday reported quarterly revenue of $462 million, up 44 percent from the same quarter last year. Its losses were $306 million. Snap relies on advertising for revenue, and some analysts expected that the company would be hurt by weakening ad demand. Because of economic volatility caused by the pandemic, Snap said it would not provide guidance for its second quarter.Snap, the maker of Snapchat, on Tuesday reported quarterly revenue of $462 million, up 44 percent from the same quarter last year. Its losses were $306 million. Snap relies on advertising for revenue, and some analysts expected that the company would be hurt by weakening ad demand. Because of economic volatility caused by the pandemic, Snap said it would not provide guidance for its second quarter.
Coca-Cola, said on Tuesday that its global volume had fallen 25 percent this month, largely from a loss of demand at businesses.Coca-Cola, said on Tuesday that its global volume had fallen 25 percent this month, largely from a loss of demand at businesses.
IBM on Monday reported slightly lower revenue for the quarter compared with a year ago, in one of the first detailed looks at the pandemic’s impact on the tech sector.IBM on Monday reported slightly lower revenue for the quarter compared with a year ago, in one of the first detailed looks at the pandemic’s impact on the tech sector.
Darden Restaurants said on Monday that sales at its restaurants, which include Olive Garden and LongHorn Steakhouse, are down nearly 45 percent compared with last year. Darden said it would try to raise money through a $400 million public offering of its stock.Darden Restaurants said on Monday that sales at its restaurants, which include Olive Garden and LongHorn Steakhouse, are down nearly 45 percent compared with last year. Darden said it would try to raise money through a $400 million public offering of its stock.
Huawei’s sales growth slowed sharply in the first quarter, the company said on Tuesday, citing “tough challenges” facing it and its suppliers as they try to maintain production amid the pandemic. The Chinese smartphone and telecom equipment maker said that revenue in the first three months of 2020 increased by 1.4 percent compared with the same period last year, a decrease from the 19.1 percent annual growth it reported for 2019.Huawei’s sales growth slowed sharply in the first quarter, the company said on Tuesday, citing “tough challenges” facing it and its suppliers as they try to maintain production amid the pandemic. The Chinese smartphone and telecom equipment maker said that revenue in the first three months of 2020 increased by 1.4 percent compared with the same period last year, a decrease from the 19.1 percent annual growth it reported for 2019.
United Airlines plans to issue more than 39 million shares, the sale of which “will be used for general corporate purposes,” the company said in a statement on Tuesday. The announcement comes a day after the airline announced that it lost $2.1 billion in the first quarter.
The coronavirus outbreak caused the economy of Hubei Province, where it first emerged, to shrink by nearly 40 percent in the first three months of 2020 compared with a year ago, the local statistics bureau said on Tuesday — a grim forewarning of the economic toll that the pandemic is likely to exact on other hard-hit places around the world.The coronavirus outbreak caused the economy of Hubei Province, where it first emerged, to shrink by nearly 40 percent in the first three months of 2020 compared with a year ago, the local statistics bureau said on Tuesday — a grim forewarning of the economic toll that the pandemic is likely to exact on other hard-hit places around the world.
Virgin Australia announced on Tuesday that it had entered voluntary administration after the Australian government refused a bailout for the company of 1.4 billion Australian dollars. The airline, which is among the largest domestic and international carriers in Australia, said it hoped to recapitalize the business to emerge in a stronger position after the coronavirus crisis, but in the meantime would continue to operate scheduled flights transporting essential workers, moving freight and returning Australians home.Virgin Australia announced on Tuesday that it had entered voluntary administration after the Australian government refused a bailout for the company of 1.4 billion Australian dollars. The airline, which is among the largest domestic and international carriers in Australia, said it hoped to recapitalize the business to emerge in a stronger position after the coronavirus crisis, but in the meantime would continue to operate scheduled flights transporting essential workers, moving freight and returning Australians home.
Reporting was contributed by Kate Conger, Raymond Zhong, Reed Abelson, Rachel Abrams, Matthew Goldstein, Robert Gebeloff, Jessica Silver-Greenberg, Vikas Bajaj, Edmund Lee, Livia Albeck-Ripka, Stanley Reed, Clifford Krauss, Vindu Goel and Mohammed Hadi.Reporting was contributed by Kate Conger, Raymond Zhong, Reed Abelson, Rachel Abrams, Matthew Goldstein, Robert Gebeloff, Jessica Silver-Greenberg, Vikas Bajaj, Edmund Lee, Livia Albeck-Ripka, Stanley Reed, Clifford Krauss, Vindu Goel and Mohammed Hadi.