US stocks mostly fall as oil prices gyrate on OPEC deal
Wall Street stocks mostly fell Monday ahead of major earnings reports, while the oil market gave a muted response to an historic deal by major producers to cut output.
Two of the three major US stock indices ended solidly lower ahead of Tuesday, when earnings season begins in earnest with results from JPMorgan Chase, Wells Fargo and other banks.
The reports will be among the first to show the effects of the near-overnight shutdown on much of the US economy in an effort to limit the spread of the coronavirus.
Some market watchers say the US economy could bounce back relatively quickly once the coronavirus situation is managed, but others warn of a more protracted slowdown due to the risk of second-wave outbreaks.
Ken Leon, a banking analyst at CFRA Research, said a key vulnerability for financial giants will be weak loan quality among commercial real estate clients, although he expects more pain to come in the second quarter.
The United States has the most deaths of any country with 22,935, although officials in New York and some other hotspots say the number of new cases has leveled off.
Asian markets ended lower, while European stocks markets were closed for the holiday.
US oil prices finished lower, while Brent futures in London gained following Sunday's announcement that major producers would cut production by 9.7 million barrels per day, which some analysts would not be sufficient to buoy prices.
The oil market was volatile following the agreement and after President Donald Trump said on Twitter that producers were looking to cut some 20 million barrels off daily output.
The agreement between the Vienna-based Organization of the Petroleum Exporting Countries and non-OPEC producers foresees output cuts in May and June followed by a gradual rise in production until April 2022.
Yet traders remained nervous about a supply glut amid estimates that demand has plunged 25 million barrels per day.
"The reality is things are bad. They are going to stay bad for a couple of months," said Dan Pickering, chief investment officer at Pickering Energy Partners in Houston.
Producers have resigned themselves to tough times, with Russian Energy Minister Alexander Novak saying he did not expect oil markets to recover before "end of the year, in the best case," according to Russian news agency TASS.
Key figures around 2030 GMT
New York - Dow: DOWN 1.4 percent at 23,390.77 (close)
New York - S&P 500: DOWN 1.0 percent at 2,761.63 (close)
New York - Nasdaq: UP 0.5 percent at 8,192.42 (close)
London - FTSE 100: Closed for a public holiday
Frankfurt - DAX 30: Closed for a public holiday
Paris - CAC: closed for a public holiday
Tokyo - Nikkei 225: DOWN 2.3 percent at 19,043.40 (close)
Shanghai - Composite: DOWN 0.5 percent at 2,783.05 (close)
Hong Kong - Hang Seng: Closed for a public holiday
Euro/dollar: DOWN at $1.0912 from $1.0937
Dollar/yen: DOWN at 107.75 from 108.47
Pound/dollar: UP at $1.2510 from $1.2455
Euro/pound: DOWN at 87.20 pence from 87.80
Brent Crude: UP 0.8 percent at $31.74 per barrel
West Texas Intermediate: DOWN 1.5 percent at $22.41 per barrel