Wall Street closed lower on Tuesday owing to the decline of crude oil prices reversing previous day's sharp gains. All three major stock indexes continued to rally strongly most of the trading session. However, indexes erased early gains in the last hour following the tumble of crude oil prices.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) decreased 0.1% to close at 22,653.86. Notably, 15 components of the 30-stock blue-chip index ended in red while 15 finished in the green. The S&P 500 dropped 0.2% to close at 2,659.41.However, the Materials Select Sector SPDR (XLB) and Energy Select Sector SPDR (XLE) climbed 2.8% and 2.1%, respectively. Notably, five out of eleven sectors of the benchmark index closed in the red while six ended in green.
Meanwhile, tech-heavy Nasdaq Composite closed at 7,887.26, shedding 0.3%. American Airlines Group Inc. AAL is the major gainer of Nasdaq as stock price jumped 7.6%. American Airlines carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
At session's high on Apr 7, the Dow had rallied 937.25 points or 4.1%, the S&P 500 climbed 93.21 points or 3.5% and the Nasdaq Composite surged 233.20 points or 2.9%.
The fear-gauge CBOE Volatility Index (VIX) increased 3.2% to close at 46.70. A total of 13.92 billion shares were traded on Tuesday, lower than the last 20-session average of 15.42 billion.Advancers outnumbered decliners on the NYSE by a 2.71-to-1 ratio. On Nasdaq, a 1.30-to-1 ratio favored advancing issues.
Crude Oil Prices Tumble
On Apr 7, The U.S. Energy Information Administration (EIA) released its Short-Term Energy Outlook report in which it lowered the U.S. benchmark West Texas Intermediate (WTI) crude price for 2020 to $29.34 a barrel, down 23% from its March forecast. Similarly, the global benchmark Brent Crude price for 2020 was lowered to $33.04 a barrel, down 24% from its March forecast.
Moreover, the agency expects U.S. crude production of 11.76 million barrels a day this year, down 9.5% from the previous view. However, the market was expecting a decline of 20% of the U.S. oil production in the short-term. Meanwhile, EIA also forecast that the output will drop nearly 13% at 11.03 million barrels a day in 2021.
Meanwhile, investors were skeptical whether a production cut deal will be reached by the Organization of the Petroleum Exporting Countries (OPEC) and the Russia-led consortium by this week end. Further, President Donald Trump has given no clue whether he will ask U.S. oil explorers to reduce production level as part of a global effort to curb output in order to restore sagging crude oil prices.
Consequently, price of WTI crude for May delivery fell $2.45 or 9.4% to settle at $23.63 a barrel on the New York Mercantile Exchange. The Brent crude price for June delivery lost $1.18 or 3.6% to $31.87 a barrel on ICE Futures Europe.
The National Federation of Independent Business (NFIB) reported that the U.S. small business optimism index tanked to 96.4 in March from 104.5 in the prior month. This reflects the largest monthly decline in the survey's history.
Stocks That Made Headline
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