Wall Street Whipped Around by Historic Oil Price Plummet

All three major indexes are eyeing weekly losses

Deputy Editor
Apr 24, 2020 at 3:13 PM
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To no one's surprise, it was another wild week on Wall Street, with oil's historic nosedive front and center. Stocks started the week in a downward spiral after oil futures for May delivery collapsed into negative territory for the first time ever on Monday. Things improved slightly by mid-week, as crude futures began to stabilize and some of traders attention turned toward Washington's relief efforts, including a $484 billion stimulus packaged aimed at small businesses and healthcare, which was passed by House of Representatives on Thursday. 

Jobless claims were once again in focus, with the number of Americans filing for unemployment now coming in at over 26 million, according to data posted on Thursday. Elsewhere, earnings season is starting to pick up steam, as many major names, including stay-at-home staple Netflix (NFLX), post their quarterly results. As of this writing, stocks are giving up their earlier gains, while oil continues its rebound, with the three major benchmarks all eyeing sizable weekly losses. 

Optimism Dwindles Over Coronavirus Treatment

The biggest coronavirus update happened later in the week, and the news was not encouraging. A report accidentally released by the World Health Organization (WHO) revealed that Gilead Science's (GILD) remdesivir treatment, which has been a front runner for a potential COVID-19 cure, failed to improve the condition of patients impacted by the disease. Gilead claims, however, that the results of the drug's trial remain inconclusive. 

Oil, Energy Sectors Capture Wall Street, Options Traders' Attention

It's no secret oil stocks (and energy stocks, and mining stocks) were heavily affected by black gold's cataclysmic spiral this week. One energy stock in particular that options traders were targeting on Monday was WPX Energy (WPX), in light of its April 17 breakout. The options pits also latched onto copper mining stock Freeport-McMoRan (FCX) ahead of its first-quarter earnings report. 

Meanwhile, Chevron (CVX) stock managed to brush off an order from the U.S. Treasury Department demanding the oil company end its operations in Venezuela by Dec. 1. Crude oil concern Continental Resources (CLR) was also in the spotlight on news that the company ceased shale production in North Dakota. 

Earnings-Heavy Week Destroys Some Stocks, Strengthens Others

Earnings season is in full swing with some surprising numbers being released. One name in particular that impressed investors was casino concern Las Vegas Sands (LVS) after the company made a positive projection for the upcoming quarter. Packaged food producer Hershey (HSY) was not so lucky, while blue-chips Intel (INTC) and Coca-Cola (KO) also buckled after their quarterly reports. Eli Lilly (LLY) on the other hand, notched yet another record high after stepping into the earnings confessional, with sector peer Sanofi (SNY) also enjoying a post-earnings boost. 

Fed Meeting, Earnings in Focus Next Week 

Next week's highlights include an advance reading of first-quarter gross domestic product (GDP), which will undoubtedly show the beginning economic effects of the coronavirus outbreak. The Federal Open Market Committee (FOMC) will conduct a two-day policy meeting starting on Tuesday, and investors are hoping the meeting will generate some clues about how the central bank plans on tackling the COVID-19 threat while also keeping the U.S. economy humming. There's also plenty of earnings on tap next week, including reports from Facebook (FB), Twitter (TWTR), Microsoft (MSFT), and Apple (AAPL). 

Until then, check out which stocks have done the best (and worst) since stocks hit their top all the way back in February. Or read up on several historically significant S&P 500 500 Index (SPX) trendlines to watch in the next months. 


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