US, WASHINGTON (ORDO NEWS) — US stocks are falling on Tuesday for the second day in a row due to a sharp drop in US oil prices and pessimistic corporate forecasts that portend the worst economic downturn since the Great Depression amid the coronavirus pandemic.
By 18:18 UTC, the Dow Jones Industrial Average index fell 2.62%, to 23,030.54, the S&P 500 index fell 3.18% to 2,733.40, and the Nasdaq Composite index fell 4.02% to 8.216.51.
Almost all of the major S&P 500 sub-sectors are losing more than 1%, and the energy index is also declining, ending up with just one of the last eight sessions. On Monday, the price of futures for US oil WTI for the first time in history fell below zero.
On Tuesday, May WTI futures again plummeted into negative territory after dropping to almost minus $ 40 in the previous session because of concerns that the US would run out of storage capacity due to an excess of raw materials caused by the coronavirus pandemic.
OANDA’s Edward Moya believes the record oil collapse has had a limited impact on US stocks on Monday, but will not happen in the future.
“Oil prices will remain under pressure in the short term, and as energy stocks have recently recovered, they may face serious difficulties this week,” Moya said.
The S&P 500 index rose more than 25% from the March low thanks to trillion-dollar government incentive measures, but still remains nearly 17% below its all-time high, as many countries have completely closed their borders and quarantined to try to stop the spread of the virus.
In the four weeks ending April 11, the number of applications for unemployment benefits in the US reached 22 million, and analysts predict that over the past week their number will increase by 5 million. It is expected that April data on manufacturing activity in the United States, which will also be released on Thursday, will drop to levels characteristic of the era of recession.
The financial index fell 1.9% as investors sought security by investing in bonds and the dollar.
Coca-Cola Co said it expects a significant negative impact on its performance in the current quarter, as restaurants, cinemas and other establishments, which account for about half of the company’s revenue, remain closed due to the coronavirus pandemic.
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