Benchmarks ended in the red on Monday, owing to the decline in oil prices. Global storage deficiency coupled with declining demand for crude amid lockdown impacted oil prices. In addition, the Senate’s inability to reach a deal over the coronavirus small business relief program also weighed on investors’ sentiment.
The three major indices — the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite — closed in the red on Monday. The Dow Jones Industrial Average closed at 23,650.44 after losing 2.4%, the broader S&P 500 reached 2,823.16 after declining 1.8% and the tech-laden Nasdaq Composite hit 8,560.73 after decreasing 1%.
The fear-gauge CBOE Volatility Index (VIX) rose 3.6% to close at 45.39 on Apr 20. Finally, decliners outnumbered advancers on the NYSE by a 2.08-to-1 ratio.
US Oil Prices Turn Negative First Time in History
On Apr 21, oil prices plummeted to record lows, stepping into negative territory for the first time in history. West Texas Intermediate crude for May delivery slid more than 306% to settle at -$37.63 a barrel. The May contract expires at the end of Apr 22 trading session.
Oversupply of oil in the market against nil demand for the commodity amid the lockdown was the major reason behind the price slump. Brent crude, the international benchmark oil price, is still above $20 a barrel, although it has declined 70% since January to hit 18-year lows.
Shares of oil giants such as Exxon Mobil Corporation (XOM - Free Report) and Chevron Corporation (CVX - Free Report) shed as much as 4.7% and 4.1% at the end of Monday’s trading session.
Senate Doesn’t Reach Key Small Business Aid Program
The Senate was unable to reach an agreement on Apr 20 over the next COVID-19 relief bill. However, a vote has been set up on the afternoon of Apr 21 for the same. Congressional Democrats had discussed with the Treasury department on the next rescue package to offer the economy, so as to get it back on track and running again.
In fact, earlier this week, negotiators indicated that they had closed in on a deal that could offer up to $370 billion in loan programs to small businesses.The bill could also comprise of $75 billion for hospitals and $25 billion for testing.
Corporates Manage to Paint a Decent Earnings Picture
Shares of Truist Financial Corporation (TFC - Free Report) gained 2.2% on Apr 20 after the company’s first-quarter 2020 adjusted earnings of 87 cents per share beat the Zacks Consensus Estimate of 54 cents. Improvement in revenues and rise in loan and deposit balances were the reasons behind Truist Financial’s notable earnings beat.
The company’s total revenues came in at $5.65 billion, up 54.7% sequentially. The reported revenues also surpassed the Zacks Consensus Estimate of $5.50 billion. (Read more)
Shares of Halliburton Company (HAL - Free Report) added 0.7% on Monday after the company reported better-than-expected first-quarter 2020 earnings on the back of robust international activity offset headwinds in North America. Halliburton reported earnings of 31 cents per share, which beat the Zacks Consensus Estimate of 25 cents.
Although the company’s revenues of $5 billion marginally missed the Zacks Consensus Estimate by $9 million, the oilfield services company’s international operations increased 5% from the year-ago period to $2.6 billion, an area that continues to perform remarkably. (Read more)
Shares of M&T Bank Corporation (MTB - Free Report) gained 0.1% on Apr 20 after the company’s reported first-quarter 2020 earnings surpassed the Zacks Consensus Estimate. M&T Bank’s net operating earnings per share of $1.95 beat the Zacks Consensus Estimate of $1.55.
Higher fee income and improved loan balance helped the financial organization to post such decent earnings. In addition, the company’s revenues of $1.51 billion for the quarter also outpaced the consensus estimate of $1.48 billion. (Read more)
Truist Financial and Halliburton Company carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Made Headlines
NuStar Inks $750M Term-Loan Deal, Cuts Capex to Fight Coronavirus
With oil price witnessing a free fall, NuStar Energy L.P. (NS - Free Report) recently announced slashing its 2020 capital budget for preserving liquidity. (Read more)
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