Investing.com – The sea of red returned on Wall Street, pushing the Dow back toward its lows of the day, after oil prices fell below zero for the first time ever, as the glut in supply exacerbated worries over storage capacity, at a time when the Covid-19 pandemic continues to weigh on crude demand.
The Dow fell 1.8%, or 438 points, after falling by as many as 507 points intraday. The S&P 500 slipped 1.3% and the Nasdaq Composite lost 0.4%.
Energy stocks fell 3.5%, though had been down more than 6%, with the price of oil for delivery in May, turning negative as the swelling of supply in the wake of coronavirus-led hit to demand has producers worried about storage constraints.
"The extreme oversupply situation now in April and expected into May is creating huge dislocations for the May 2020 WTI NYMEX contract today in low traded volumes," said Rystad's Bjornar Tonhaugen according to the Wall Street Journal. "There is probably a squeeze happening right now, while the remaining 21
M bbls of Cushing storage is likely to be filled up into May 2020 at the current pace of stock builds."
Corporate earnings, meanwhile, continued to underscore the impact from the coronavirus, which has killed about 168,000 and infected nearly 2.5 million worldwide.
United Airlines (NASDAQ:UAL) dropped 5% after reporting a $2.1 billion loss in the first quarter as revenue fell 17% to $8.0 billion amid a plunge in travel due to the Covid-19 pandemic.
In sharp contrast, stocks that are expected to benefit from the current lockdown measures continued to climb, with Roku (NASDAQ:ROKU), Netflix (NASDAQ:NFLX), and Amazon.com (NASDAQ:AMZN) rising 3%, 3.8% and 1.4% respectively.
Healthcare stocks lagged the broader decline, thanks to a rally in Alexion Pharmaceuticals (NASDAQ:ALXN), Bristol-Myers Squibb (NYSE:BMY) and Abbott Laboratories (NYSE:ABT).
Reports that Congress is nearing a deal to replenish the $349 billion Paycheck Protection Program - launched at the beginning of the month to deliver fiscal support for small businesses in the wake of the coronavirus crisis - helped support sentiment.
In the ongoing battle against the Covid-19, New York state continued to release encouraging results as intubations fell by 32 compared with a 152 decline yesterday, while total hospitalizations were about flat compared with a total of 1384 a day earlier, according to New York Gov. Andrew Cuomo. The Covid-19 curve in New York is "off of the plateau and now starting a descent," he added.
