U.S. Stocks Move Sharply Lower Amid Worries About Oil Prices

Stocks moved sharply lower over the course of the trading day on Tuesday, extending the pullback seen in the previous session. The major averages continued to give back ground after ending last Friday’s trading at their best closing levels in over a month.

The major averages all posted steep losses on the day. The Dow tumbled 631.56 points or 2.7 percent to 23,018.88, the Nasdaq plunged 297.50 points or 3.5 percent to 8,263.23 and the S&P 500 plummeted 86.60 points or 3.1 percent to 2,736.56.

Continued concerns about yesterday’s historic nosedive by crude oil prices weighed on Wall Street amid worries about the impact on the already hard hit U.S. energy industry.

The price of crude oil for May delivery showed a substantial rebound after plummeting into negative territory for the first time ever on Monday, although later month contracts moved sharply lower.

The May contract for crude oil, which expires today, closed at $10.01 a barrel, spiking $47.64 from yesterday’s close of negative $37.63 a barrel.

Meanwhile, the much more actively June contract extended the sell-off seen in the previous session, plunging $8.86 to $11.57 a barrel.

Lingering concerns about the ongoing coronavirus pandemic also generated some negative sentiment, with President Donald Trump revealing plans to suspend immigration in the U.S. as a result of the outbreak.

“In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!” Trump said in a post on Twitter on Monday.

On the U.S. economic front, the National Association of Realtors released a report showing existing home sales pulled back sharply in the month of March.

NAR said existing home sales plunged by 8.5 percent to an annual rate of 5.27 million in March after spiking by 6.3 percent to a revised of 5.76 million in February.

Economists had expected existing home sales to plummet 8.1 percent to a rate of 5.30 million from the 5.77 million originally reported for the previous month.

Among individual stocks, shares of IBM Corp. (IBM) moved sharply lower after the tech giant reported better than expected first quarter earnings but its revenues missed estimates. IBM also withdrew its full-year guidance.

Sector News

Software stocks turned in some of the market’s worst performances on the day, dragging the Dow Jones U.S. Software Index down by 4.6 percent.

The software index continued to give back ground after ending last Friday’s trading at its best closing level in nearly two months.

Reflecting weakness throughout the tech sector, semiconductor, networking and computer hardware stocks also showed substantial moves to the downside on the day.

Significant weakness was also visible among banking stocks, as reflected by the 3.8 percent nosedive by the KBW Bank Index.

Healthcare, tobacco, biotechnology and telecom stocks also saw considerable weakness on the day, moving sharply lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index plummeted by 2 percent, while China’s Shanghai Composite Index slid by 0.9 percent.

The major European markets also showed substantial moves to the downside on the day. While the German DAX Index nosedived by 4 percent, the French CAC 40 Index plunged down by 3.8 percent and the U.K.’s FTSE 100 Index tumbled by 3 percent.

In the bond market, treasuries extended the upward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dropped 5.5 basis points to 0.571 percent.

Looking Ahead

Amid a quiet day on the U.S. economic front, trading on Wednesday may be impacted by developments on the coronavirus front and the price of crude oil.

Earnings news may also attract attention, with Netflix (NFLX), Snap (SNAP), Texas Instruments (TXN), and Chipotle Mexican Grill (CMG) among the companies releasing their quarterly results after the close of today’s trading.

AT&T (T), Biogen (BIIB), Delta Air Lines (DAL), Ericsson (ERIC), Kimberly-Clark (KMB) and Quest Diagnostics (DGX) are also among the companies due to report their results before the start of trading on Wednesday.

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