US Market falls for second day on slump in oil prices

The US equity market finished lower for second straight session on Tuesday, 21 April 2020, as investors worried that historic slump in oil prices amid plunging demand for the commodity would dent a key sector for U.S. employment and investment and signal a deeply depressed global economy. At closing bell, the Dow Jones Industrial Average tumbled fell 630.73 points, or 2.67%, to 23,019.71. The S&P 500 - a gauge of US retirement and education savings accounts - lost 86.60 points, or 3.1%, to close at 2,736.56. The tech-heavy Nasdaq Composite Index retreated 297.50 points, or 3.5%, to 8,263.23.

The oil market collapse weighed on markets and investor sentiment for a second straight day. Concerns about oil storage availability amid weaker demand for the commodity and a weekslong dispute between Russia and OPEC nations, have propelled the historic oil sell-off. OPEC and Russia eventually agreed to cut production by 10 million barrels per day in May.

 

West Texas Intermediate's contract for May delivery -- which traded below $0 on Monday for the first time in history -- rebounded slightly Tuesday but was trading at less than $5. For June delivery, which experts view as a better indicator of how Wall Street views oil prices, WTI fell 43.4% to $11.57 per barrel on Tuesday. The crude price rout extended to global benchmark Brent with the contract for June deliveries closed at $19.33.

The news of plunging crude oil prices overshadowed efforts by some U.S. states, including Georgia, South Carolina, Tennessee and Texas, to ease restrictions on businesses and consumers that were put in place to combat the spread of COVID-19. As per reports, Congress has reached a deal to provide $450 billion of additional funding to U.S. small businesses hurt by the coronavirus pandemic, with the Senate attempting to pass the measure later today, after lawmakers provided a roughly $350 billion package that was exhausted last week.

Market participants were monitoring North Korea amid speculation about a possible political upheaval brewing in the isolated nation after unconfirmed reports indicate that Kim Jong Un is fragile after recovering from heart surgery. The reports say Kim hasn't made a public appearance since April 11.

Technology-sector stocks were under pressure after investment houses cut their price targets for Alphabet Inc. and Facebook and warned about further weakness in online advertising sales.

ECONOMIC NEWS: US Existing Home Sales Plunge 8.5% In March--US existing home sales plunged by 8.5% to an annual rate of 5.27 million in March after spiking by 6.3% to a revised of 5.76 million in February, the National Association of Realtors reported on Tuesday. Despite the steep monthly decline, existing home sales in March were up by 0.8% compared to the same month a year ago, reflecting the ninth straight month of year-over-year growth. The report said the median existing home price for all housing types was $280,600 in March, up 3.8% from $270,400 in February and up 8.0% from $259,700 in the same month a year ago.

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