- US stocks slid on Monday in their first day of trading after the S&P 500 completed its best weekly gain since 1974.
- Investors mulled heightened uncertainty heading into earnings season.
- JPMorgan, Wells Fargo, and Johnson & Johnson are among the firms set to announce their first-quarter results on Tuesday. They’ll offer a preliminary look at how hard the coronavirus outbreak is hitting corporate profits.
- Crude oil also slid on Monday, capping off a volatile session that saw the commodity whipsaw between gains and losses after OPEC and Russia agreed to a historic production cut.
- Watch major indexes update live here.
US stocks slid on Monday as investors mulled upcoming earnings reports set to detail the extent of the coronavirus outbreak’s hit to corporate profits. The S&P 500 entered the session fresh off its best week since 1974.
Equity-market losses came as gains in crude oil evaporated in a highly volatile session. The turbulent trading followed a historic accord that saw Russia and its OPEC allies agree to the largest production cut in history.
Here’s where major US indexes stood at the 4 p.m. ET market close on Monday:
- S&P 500: 2,761.63, down 1%
- Dow Jones industrial average: 23,390.77, down 1.4% (329 points)
- Nasdaq composite: 8,192.42, up 0.5%
JPMorgan, Wells Fargo, and Johnson & Johnson are among the companies scheduled to report their first-quarter results on Tuesday. Many firms on Wall Street are expecting a sharp contraction in corporate profits. Goldman Sachs analysts said on Monday that investors should pay more attention to 2021 guidance than near-term earnings for signs of how quickly the market may rebound.
Analysts at Bank of America on Monday forecast an earnings recession, projecting that year-over-year earnings will plunge 13% on the coronavirus outbreak’s economic impact.
“We see even more downside risk to rest-of-year consensus estimates, where analysts forecast a -8% YoY decline in 2020 overall,” the team led by Savita Subramanian wrote in a note.
Ford slipped 4% after the automaker said the coronavirus pandemic would lead to a $6 billion year-over-year decline in quarterly revenue.
SCWorx, a small biotech logistics firm, was among the day’s winners, closing 425% higher after announcing that a healthcare firm had pledged to buy 48 million COVID-19 testing kits from the company. It said the tests would be delivered over 24 weeks at about $35 million per week.
West Texas Intermediate crude oil slid 0.4% after a volatile session that saw the commodity whipsaw between gains and losses on multiple occasions. The commodity initially surged as much as 9% right after futures trading commenced on Sunday evening. Brent crude rose 2%.
The deal between OPEC allies is a major deescalation in the weeks-long price war between the two parties and lifted significant downward pressure on the commodity. The agreement calls for a global production cut of 9.7 million barrels per day, landing just below the 10 million target proposed by President Donald Trump before the meeting.
Saudi Aramco slashed its official selling price for Asia and the Mediterranean region on Monday, signaling that it will continue to fight for market dominance in those markets and compete with rival producers. The price cut brought its selling price in Asia to near two-decade lows. Prices for buyers in the US and northwest Europe were pushed higher.
Monday’s stock-market decline followed the S&P 500’s 12% gain last week, its best since 1974. The short trading week saw $2.3 trillion in fresh stimulus from the Federal Reserve, talks of a stage-four relief bill, and slowing infection rates in some of the US’s virus hot spots.
Weekly jobless claims declined to 6.6 million from the previous week’s 6.7 million reading, bringing the rolling three-week total to an unprecedented 17 million filings.
The Fed’s Thursday stimulus announcement “represents a pivotal moment in this crisis” and was largely underestimated by investors, JPMorgan strategists said. The fresh aid reinforced the bank’s expectation of a full market recovery and record highs by the first half of 2021.
“Investors with focus on negative upcoming earnings and economic developments are effectively ‘fighting the Fed,’ which was historically a losing proposition,” Marko Kolanovic and Bram Kaplan of JPMorgan wrote in a Monday note.
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