News World Wall Street drops as U.S. producers can't give crude away

Wall Street drops as U.S. producers can’t give crude away

Wall Street fell sharply on Monday after U.S. crude futures turned negative for the first time in history, underscoring the chaos the coronavirus pandemic has unleashed on the global economy.

The S&P energy index tumbled 4% after the front-month May U.S. West Texas Intermediate (WTI) contract turned negative – unprecedented in history – with sellers offering buyers $37.63 a barrel.

With much of the global economy suspended due to the coronavirus, physical demand for crude has dried up, creating a global supply glut as billions of people stay home.

“What the energy market is telling you is that demand isn’t coming back anytime soon, and there’s a supply glut,” said Kevin Flanagan, head of fixed income strategy at WisdomTree Asset Management in New York. “This price decline can be good if it means more people going to the pump, but that requires people getting out.”

Weathering the broad market sell-off, Amazon rose 1.6% and Netflix jumped 4%. Both of those companies have benefited from additional demand as millions of people stay home due to the coronavirus. Netflix reports its quarterly results on Tuesday after the bell.

Helped by a $2 trillion U.S. government package to stimulate the economy, and by bets that the virus was nearing a peak in the United States, the S&P 500 has climbed over 25% from its March low.

The benchmark index remains 15% below its February record high, and analysts have warned of a deep economic slump from the halt in business activity and millions of layoffs.

U.S. jobless claims touched 22 million in the four weeks to April 11, and analysts have forecast as many as 5 million more in the latest week. A reading of an April U.S. manufacturing survey, also due Thursday, is expected to slide to recession-era levels.

At 2:57 p.m. ET, the Dow Jones Industrial Average was down 2.22% at 23,704.26 points, while the S&P 500 lost 1.61% to 2,828.14.

The Nasdaq Composite dropped 0.75% to 8,585.27.

International Business Machines Corp rose 0.7% ahead of its quarterly report, expected after markets close.

Declining issues outnumbered advancing ones on the NYSE by a 3.01-to-1 ratio; on Nasdaq, a 1.63-to-1 ratio favored decliners.

The S&P 500 posted 10 new 52-week highs and no new lows; the Nasdaq Composite recorded 38 new highs and 12 new lows.

(Reuters)

Top Stories

Tourist arrivals plunge by 84% in 2020 in one of Cyprus’ worst tourist seasons due to Covid

Tourist arrivals in Cyprus reached a mere 631,609 plunging by 84.1% year on year in one of the worst ever season for Cyprus’ tourist...

Germany demands release of Kremlin critic Navalny

Germany on Monday demanded the release of Kremlin critic Alexei Navalny, detained on Sunday on his return to Russia, and said it would discuss...

Memorial for COVID-19 victims in Washington

Thousands of U.S. flags are seen at the National Mall, as part of a memorial paying tribute to the more than 200,000 people nationwide...

Snow and fog in Troodos, roads open only to 4WD

Police are warning drivers heading to Troodos to be careful because of snow and fog. The Karvounas-Troodos, Platres-Troodos and Prodromos Troodos roads are open only...

Three reasons SMS to 8998 are rejected

According to the Ministry of Research, Innovation and Digital Policy, there are three reasons the system does not approve SMS messages by citizens wishing...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...