NATIONAL NEWS

Stocks Sink Under Weight Of Another Collapse In Oil Prices

Apr 20, 2020, 8:42 AM
FILE PHOTO...
FILE PHOTO

NEW YORK (AP) — Stocks are falling in early trading on Wall Street Monday, as energy stocks get hammered by the latest collapse in the price of oil.

The S&P 500 was down 1% after the first 15 minutes of trading, ahead of a busy week where dozens of CEOs at the biggest U.S. companies are scheduled to show investors how badly the coronavirus outbreak hit their profits in the first three months of the year.

The losses ate into some of the big gains the market has made since late March, driven lately by investors looking ahead to parts of the economy possibly reopening as infections level off in hard-hit areas. Pessimists have called the rally overdone, pointing to the severe economic pain sweeping the world.

That pain is perhaps most prevalent in the oil industry, where idled factories and automobiles around the world have forced demand for energy to collapse.

Benchmark U.S. crude oil for June delivery plunged 9% to $22.75 per barrel, as of 9:45 a.m. Eastern time. Oil for delivery in May cratered by an even wider margin, down 34% to just $12.00. Earlier in the morning, it touched its lowest price since 1998.

The contract for oil delivery in May is close to expiring, so trading is much more active in the June contract. But both are dropping sharply on the same fear: Demand for oil has shriveled so much — while producers continue to pull it from the ground — that facilities for storing crude in Oklahoma are close to running out of room.

Energy stocks in the S&P 500 sank 4.5% for the worst loss among the 11 sectors that make up the index.

Among them was Halliburton, which fell more than 5% even though it reported stronger profit and revenue for the first three months of 2020 than analysts expected. The oilfield services provider said that the pandemic has created so much turmoil in the industry that it “cannot reasonably estimate” how long the hit will last. It expects a further decline in revenue and profitability for the rest of 2020, particularly in North America.

Brent crude, the international standard, was down $1.38, or 4.9%, to $26.70 per barrel. Big oil-producing countries have agreed to cut production to help balance supplies with demand, but many analysts say the cuts are not sharp enough to lift prices.

“Basically, bears are out for blood,” analyst Naeem Aslam of Avatrade said in a report. “The steep fall in the price is because of the lack of sufficient demand and lack of storage place given the fact that the production cut has failed to address the supply glut.”

The Dow Jones Industrial Average was down 327 points, or 1.3%, to 23,914, and the Nasdaq was down 0.6%.

In Tokyo the Nikkei 225 fell 1.1% after Japan reported that its exports fell nearly 12% in March from a year earlier as the pandemic hammered demand in its two biggest markets, the U.S. and China.

The Hang Seng index in Hong Kong lost 0.2%, and South Korea’s Kospi fell 0.8%.

U.S. Treasury yields remained extremely low. The yield on the 10-year Treasury slipped to 0.62% from 0.65% late Friday. It started the year near 1.90%. Bond yields drop when their prices rise, and investors tend to buy Treasurys when they’re worried about the economy.

The S&P 500 has trimmed its loss by roughly half since falling from its record in February. It’s now down about 16% from its high, after being down 33% in late March.

KSL 5 TV Live

Top Stories

National News

The rotation of Earth's core may have paused, scientists in China have suggested. (Adobe Stock via ...
Lianne Kolirin

Earth’s inner core may have stopped turning and could go into reverse, study suggests

The rotation of Earth's inner core may have paused and it could even go into reverse, new research suggests.
15 hours ago
A worker rings up a customer at a cash register in a Walmart store on January 24, 2023 in Miami, Fl...
Paul Wiseman, Associated Press

US economy slowed but still grew at 2.9% rate last quarter

The U.S. economy expanded at a 2.9% annual pace from October through December, ending 2022 with momentum despite the pressure of high interest rates and widespread fears of a looming recession.
15 hours ago
Chunli Zhao appears for his arraignment at San Mateo Superior court in Redwood City, Calif., on Wed...
Olga R. Rodriguez and Jocelyn Gecker, Associated Press

Suspect in Half Moon Bay farm killings faces 7 murder counts

A farmworker accused of killing seven people in shootings at two Northern California mushroom farms has been charged with seven counts of murder.
15 hours ago
In an aerial view, San Francisco police officers and F.B.I. agents gather in front of the home of U...
Adam Beam, Associated Press

California judge orders release of footage of Pelosi attack

Footage of the attack on former U.S. House Speaker Nancy Pelosi's husband will be released publicly.
15 hours ago
M&M's are piled in a container on January 24, 2023 in Miami, Florida. M&M's announced that its mult...
Danielle Wiener-Bronner

How M&M’s is making the most of its spokescandies controversy

Following the flood of attention its characters are going on an "indefinite pause," handing off spokesperson responsibilities to actress and comedian Maya Rudolph.
2 days ago
Police officers detain a man, believed by law enforcement to be the Half Moon Bay mass shooting sus...
Ray Sanchez

‘Tragedy upon tragedy’: 44 hours, 3 mass shootings, 19 dead

(CNN) — Forty-four hours in America. Three mass shootings. Nineteen lives wiped out. All in California. The victims in suburban Monterey Park included people between the ages of 57 and 76, ringing in the Lunar New Year Saturday night at a dance studio in the heart of the city’s Asian American community. Then it happened […]
2 days ago

Sponsored Articles

Fiber Optical cables connected to an optic ports and Network cables connected to ethernet ports...
Brian Huston, CE and Anthony Perkins, BICSI

Why Every Business Needs a Structured Cabling System

A structured cabling system benefits businesses by giving you faster processing speeds and making your network more efficient and reliable.
notebook with password notes highlighted...
PC Laptops

How to Create Strong Passwords You Can Actually Remember

Learn how you can create strong passwords that are actually easy to remember! In a short time you can create new ones in seconds.
house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 Reasons You May Want to Consider Apartment Life Over Owning a Home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Diverse Group of Energetic Professionals Team Meeting in Modern Office: Brainstorming IT Programmer...
Les Olson

Don’t Let a Ransomware Attack Get You Down | Protect Your Workplace Today with Cyber Insurance

Business owners and operators should be on guard to protect their workplace. Cyber insurance can protect you from online attacks.
Stocks Sink Under Weight Of Another Collapse In Oil Prices