US stock index futures slide as US crude crashes below zero

Gloomy quarterly earnings reports, historic plunge in prices raise spectre of deep global recession


Reuters April 21, 2020
Gloomy quarterly earnings reports, historic plunge in prices raise spectre of deep global recession. PHOTO: REUTERS

WASHINGTON: US stock index futures resumed their slide on Tuesday as gloomy quarterly earnings reports and a historic plunge in US crude prices to below zero raised the spectre of a deep global recession in the coming months.

Wall Street fell on Monday as WTI crude CLc1 crashed to minus $40 for the first time in history as sweeping restrictions to contain the coronavirus hits oil demand. With nowhere to store the excess capacity, traders fled from contracts that would deliver barrels of oil to them in May.

Exxon Mobil Corp shed 3.7% in premarket trading and Chevron Corp slipped 4.0% as the front month May WTI CLc1 contracts continued to trade below $0 on Tuesday. June contracts also fell by $4, signalling more weakness in demand in the face of a near halt in global activity.

Other oil-related companies including Apache Corp, Halliburton Co, ConocoPhillips, Schlumberger and Occidental Petroleum Corp tumbled between 6.3% and 11%.

Coca-Cola Co provided the latest evidence of the damage wrought by the pandemic, saying its current-quarter results would take a severe hit from low demand for sodas.

Investors will also keep a close eye on first-quarter earnings from major US companies including Texas Instruments and Travelers Companies later in the day.

At 06:29 am EDT, Dow e-minis were down 430 points, or 1.83%, S&P 500 e-minis were down 39.25 points, or 1.41% and Nasdaq 100 e-minis were down 71.25 points, or 0.82%. SPDR S&P 500 ETFs were down 1.59%.

The S&P 500 index closed down 1.79% at 2,823.16 on Monday.