Stock futures bounced in overnight trading on Monday as oil prices bounced off their lows following an unprecedented wipeout.
Futures on the Dow Jones Industrial Average rose 120 points. S&P 500 futures added 0.3%.
The gains came as the more actively-traded June oil contract rebounded by 2%. The May contract, which triggered Monday’s stock sell-off with a bizarre move below zero into negative prices, remained in negative territory.
IBM dipped 2.3% in extended trading after the company reported a 3.4% decline in revenue in the first quarter from a year ago amid the spread of coronavirus. Coca-Cola, Netflix and Chipotle are on deck to report earnings on Tuesday.
Stocks dropped on Monday to start another likely volatile week, with the Dow falling nearly 600 points, as an unprecedented plunge in oil prices weighed on investor sentiment. West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, highlighting just how much demand has collapsed due to the coronavirus pandemic.
Still, the international benchmark Brent crude and the June WTI contract both were still above $20 per barrel. The June contract, which fell 18% to settle at $20.43 on Monday, is a better reflection of the reality in the oil market.
Also on Monday, the Senate failed to reach a deal on the next package to rescue an economy and health care system ravaged by the global pandemic. However, a vote is set up as soon as Tuesday afternoon to replenish a key small business aid program.
Investors continued to monitor the coronavirus pandemic and the country’s plan to reopen the economy. Signs have emerged that New York is past the worst of its outbreak. Georgia on Monday rolled out aggressive plans to reopen the state’s economy, calling for many businesses to reopen their doors as early as Friday.
Stocks enjoyed their first back-to-back weekly gains as investors grew more optimistic that the pandemic is easing off. The S&P 500 is now about 17% from its record high on Feb. 19, cutting about half of its losses during the coronavirus sell-off.
“Market volatility remains intense, as subtle changes in the tone of the news drives dramatic shifts in investor sentiment,” said Mark Hackett, Nationwide’s chief of investment research. “Markets rallied sharply last week on hope that the worst of the outbreak is behind us. This optimism is likely to face headwinds, as the reopening of the economy is heading for an intense debate.”
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