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* U.S. crude front-month drops to record low -$37.63 a
barrel
* Netflix rallies ahead of quarterly report on Tuesday
* Indexes end: Dow -2.44%, S&P 500 -1.79%, Nasdaq -1.03%
(Updates with details after the close)
By Noel Randewich
April 20 (Reuters) - Wall Street tumbled on Monday after
U.S. crude futures turned negative for the first time ever, with
traders forced to pay to unload crude as the May contract
expired during a global economic slump unleashed by the
coronavirus outbreak.
The S&P energy index .SPNY tumbled 3.7% after the
front-month May U.S. West Texas Intermediate (WTI) contract
CLc1 actually turned negative, with sellers offering $37.63 a
barrel to any traders willing to take it. O/R L1N2C80CS
With billions of people staying home around the world due to
the coronavirus, physical demand for crude has dried up.
“What the energy market is telling you is that demand isn't
coming back anytime soon, and there's a supply glut," said Kevin
Flanagan, head of fixed income strategy at WisdomTree Asset
Management in New York.
He said lower oil prices could boost the economy if it
encouraged people to buy more fuel, "but that requires people
getting out.”
Year to date, the energy index has lost 45%, by far the
worst performer among 11 sectors.
Weathering the broad market sell-off, Amazon AMZN.O rose
0.8% and Netflix NFLX.O jumped 3.4%. Those companies have
benefited from additional demand as millions of people stay home
due to the coronavirus. Netflix reports its quarterly results on
Tuesday after the bell.
Helped by a $2 trillion U.S. government package to stimulate
the economy, and by bets that the virus was nearing a peak in
the United States, the S&P 500 has climbed over 25% from its
March low.
The benchmark index remains almost 17% below its February
record high, and analysts have warned of a deep economic slump
from the halt in business activity and millions of layoffs.
U.S. jobless claims touched 22 million in the four weeks to
April 11, and analysts have forecast as many as 5 million more
in the latest week. A reading of an April U.S. manufacturing
survey, also due on Thursday, is expected to slide to
recession-era levels.
The Dow Jones Industrial Average .DJI dropped 2.44% to end
at 23,650.44 points, while the S&P 500 .SPX lost 1.79% to
2,823.16.
The Nasdaq Composite .IXIC dropped 1.03% to 8,560.73.
In extended trade, International Business Machines Corp
IBM.N rose 0.5% after it posted quarterly revenue slightly
lower than Wall Street expected, but beat profit targets.
During Monday's session, volume on U.S. exchanges was 12.3
billion shares, compared to a 13.4 billion average for the full
session over the last 20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a
2.99-to-1 ratio; on Nasdaq, a 1.62-to-1 ratio favored decliners.
The S&P 500 posted 10 new 52-week highs and no new lows; the
Nasdaq Composite recorded 39 new highs and 20 new lows.