Wall Street falls as U.S. crude collapse worsens pandemic woes
By C Nivedita and Shreyashi Sanyal (Reuters) - Wall Street retreated for a second straight day on Tuesday as a collapse in U.S. crude prices and glum annual forecasts by companies foreshadowed the biggest economic slump since the Great Depression due to the coronavirus outbreak.
By C Nivedita and Shreyashi Sanyal
(Reuters) - Wall Street retreated for a second straight day on Tuesday as a collapse in U.S. crude prices and glum annual forecasts by companies foreshadowed the biggest economic slump since the Great Depression due to the coronavirus outbreak.
All the major S&P 500 sub-sectors fell more than 2%, with the energy index sliding for the seventh time in eight sessions a day after the WTI contract crashed below zero as oil traders ran out of storage for May deliveries.
With the collapse spilling into June futures contracts, investors became wary of the extent of the economic damage from sweeping lockdown measures that have halted business activity and sparked millions of layoffs.
With many sectors facing the risk of a collapse, investors are looking to first-quarter earnings reports for the impact of the health crisis on Corporate America after big U.S. banks set the stage with dismal outlooks for 2020.
"What we're hearing about is a quarter that's in the rear-view mirror, but also do not know what the future holds in the second quarter, which is probably going to be worse," said Art Hogan, chief market strategist at National Securities in New York.
The benchmark S&P 500 index has climbed over 25% from a March low, powered by trillions of dollars in stimulus, but still remains nearly 17% below its record high due to state-wide shutdowns to try to contain the virus.
U.S. jobless claims hit 22 million in the past month as companies launched dramatic cost-saving measures to ride out the slump, and readings of U.S. business activity surveys, due Thursday, are likely to plummet to recession-era lows.
The financials index fell 2.9% as the flight from risk sent investors scurrying to the perceived safety of bonds and the dollar.
Coca-Cola Co provided the latest evidence of the damage wrought by the pandemic, saying its current-quarter results would take a severe hit from low demand for sodas.
Travelers Companies, the first of the big U.S. insurers to report results, reported a 25% fall in quarterly profit, hurt by higher catastrophe losses, but its shares rose 2.5%.
Among other Dow components, International Business Machines Corp slid 6.2% after the company withdrew its 2020 annual forecast late on Monday.
Chip industry bellwether Texas Instruments is set to report its first-quarter earnings later in the day.
At 11:42 a.m. ET the Dow Jones Industrial Average was down 657.32 points, or 2.78%, at 22,993.12, the S&P 500 was down 90.29 points, or 3.20%, at 2,732.87 and the Nasdaq Composite was down 329.55 points, or 3.85%, at 8,231.18.
Declining issues outnumbered advancers more than 7-to-1 on the NYSE and 4-to-1 on the Nasdaq.
The S&P index recorded one new 52-week high and no new low, while the Nasdaq recorded 18 new highs and 24 new lows.
(Reporting by C Nivedita and Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty, Sagarika Jaisinghani and Arun Koyyur)
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