U.S. stocks fell from a six-week high, with investors on edge as oil plunged to unprecedented levels and a spate of corporate earnings on tap.
The S&P 500 halted a two-day gain and the Dow Jones Industrial Average fell more than 1%. Chevron and Exxon led losses in the blue-chip index as West Texas oil futures expiring Tuesday plunged, primarily because the end of the May contract forces physical receipt at a time when storage capacity is low. June prices fell below $23 a barrel.
Gains in large-cap tech had buoyed equities for much of the morning, but the support faded in the afternoon. Congress is negotiating a fresh spending bill to offset the pandemic’s effects, and signs have emerged that New York is past the worst of its outbreak.
“It’s going to take some time for us to come back and there’s no guarantee we’ll come back without a resurgence,” said Jerry Braakman, chief investment officer of First American Trust, in Santa Ana, California, which is managing $1.8 billion.
The Stoxx Europe 600 Index edged higher. Shares retreated across much of Asia, though the benchmark in Shanghai rose. European bonds dropped as Treasuries advanced.
Investors start the week weighing both the oil crash and signs that Congress is close to a fresh spending package. The pace of earnings season is about to pick up, with almost one-fifth of S&P 500 companies reporting this week. Coca-Cola Co. and Netflix Inc. are among companies due to report in the coming days.
Governments and policy makers are continuing attempts to limit the economic damage of the pandemic. U.S. lawmakers are moving closer to a deal to top up funds for small businesses, China pledged more stimulus as banks lowered borrowing costs and European officials are discussing creating a bad bank for the region, according to the Financial Times.