The sharp fall in crude oil prices rocked sentiment on Wall Street on Monday. In addition, given the reporting season that has just started, investors are …
NEW YORK (dpa-AFX) – The sharp drop in crude oil prices tipped the mood on Wall Street on Monday. In addition, investors are cautious in view of the current reporting season, it said on the market. The US leading index Dow Jones Industrial (Dow Jones 30 Industrial), which fought several times over the course of trading for the 24,000 point mark, ultimately closed well below it again.
After two very strong weeks, the Dow ended the day at a discount of 2.44 percent to 23,650.44 points. The market-wide S&P 500 lost 1.79 percent to 2823.16 meters. The NASDAQ 100 lost 1.20 percent to 8726.51 points.
Since the futures contract on WTI-oil for the month of May expires, many traders who only trade these financial instruments speculatively on the market tried to sell them at the start of the week, even with high losses. Otherwise they are threatened with delivery of the oil. This ensured that the price was last at minus 48 US dollars and means that buyers receive money when they buy it.
The trigger for this unusual situation is that, especially in the USA, a lot of oil is still being produced, but at the same time it is hardly being bought because of the economic standstill. Due to the Corona crisis, significantly less petrol is used and – since hardly any aircraft have been flying for some time – only very little kerosene.
Aside from the oil market debacle, market analyst Craig Erlam from broker Oanda referred to the numerous upcoming quarterly reports that could soon be cause for concern. “Investors are becoming more cautious as the reporting season begins,” he warned.
At the start of the week, however, only a few companies presented figures, among them the oil field equipment supplier Halliburton. After initially plummeting in early trading, the share quickly recovered and ultimately gained 0.7 percent. Together with better-than-feared numbers for the first quarter, plans for cost reductions were announced. Halliburton also informed that an interruption in the oil field supply chain was not perceptible because of the virus.
The specialty chemicals company Dupont (DuPont de Nemours) also reported on its past quarter and at the same time secured loans of three billion dollars due to the threat of weak demand in the wake of the corona crisis. CEO Ed Breen described the financial results in the first quarter as “solid”, but at the same time withdrew the annual targets. Independent of this, the US bank JPMorgan also upgraded the share to “Overweight” because it is valued too cheaply in their opinion. The paper profited at the top in the S&P 100 with plus 3.6 percent.
After the market closes, the IT and consulting company IBM will present quarterly figures, among others. Its stock took the top in the Dow with plus 0.2 percent, followed by Cisco paper, which rose 0.1 percent.
For the shares of the ailing aviation giant Boeing, however, it fell by 6.8 percent at the end of the index. The China Development Bank Financial Leasing Co. withdrew an order for 29 machines of the type 737 Max, which had fallen into disrepute after several crashes. This means that the number of outstanding orders for the Boeing 737 aircraft has fallen to 70.
The Dow’s shares in the oil companies ExxonMobil and Chevron suffered from the fall in the oil price, with a loss of up to five percent.
On the US bond market, trend-setting 10-year government bonds rose 7/32 points to 108 12/32 points and returned 0.618 percent. At the same time, the euro rate moved only a little. At the close of the Wall Street market, the common currency was priced at $ 1.0862. As on Friday, the European Central Bank set the reference rate at $ 1.0860. The dollar thus cost 0.9208 euros./ck/he
— By Claudia Müller, dpa-AFX —
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