Market Overview

Mid-Morning Market Update: Markets Open Lower; Oil Drops 20% Following Saudi-Russia Price War

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Following the market opening Monday, the Dow traded down 5.5% to 24439.91 while the NASDAQ fell 5.07% to 8140.47. The S&P also fell, dropping 5.42% to 2811.13. Coronavirus cases continued to accelerate beyond China. South Korea confirmed 96 new coronavirus cases, while mainland China reported 40 new confirmed cases. Italy reported 133 deaths on Sunday, while there were 49 new deaths in Iran. In total, there are at least 107,000 cases of COVID-19 worldwide with over 3,600 deaths.

Leading and Lagging Sectors

Consumer staples shares slipped by just 3.4% on Monday. Meanwhile, top gainers in the sector included The Clorox Company (NYSE: CLX), up 1%, and Campbell Soup Company (NYSE: CPB), up 0.1%.

In trading on Monday, energy shares tumbled 18%.

Top Headline

Crude oil futures dropped by the most percentage points since the gulf war of 1991, as Saudi Arabia and Russia engaged in a price war.

Saudi Arabia announced that it is cutting the price for April crude oil to all destinations by $6 to $8, as reported by Reuters, causing the oil prices to crash to their worst since early 2016. The move followed Russia's denial to cooperate with the Organization of Petroleum Exporting Countries' decision to slash oil supply in the wake of reduced demand due to the novel coronavirus (COVID-19) outbreak.

Equities Trading UP

AIM ImmunoTech Inc. (NYSE: AIM) shares shot up 84% to $3.86 amid the continued global coronavirus spread. The company's Ampligen is being tested by Japan's National Institute of Infectious Diseases as a potential coronavirus treatment.

Shares of Vaxart, Inc. (NASDAQ: VXRT) got a boost, shooting 29% to $3.29.

Enzo Biochem, Inc. (NYSE: ENZ) shares were also up, gaining 31% to $4.46. Shares of Enzo Biochem jumped over 50% on Friday after the company’s fiscal second-quarter revenue edged up from $19.3 million in 2019 to $19.4 million in 2020. The non-GAAP loss narrowed from 18 cents per share to 12 cents per share. The company’s subsidiary, Enzo Clinical Labs, announced plans to launch coronavirus testing services this week.

Equities Trading DOWN

SM Energy Company (NYSE: SM) shares tumbled 60% to $1.52 amid a steep decline in the price of oil after OPEC members failed to reach a production agreement. Saudi Arabia also pledged to cut its oil prices and increase supply.

Shares of Matador Resources Company (NYSE: MTDR) were down 55% to $2.96. SunTrust Robinson Humphrey downgraded Matador Resources from Buy to Hold.

Valaris plc (NYSE: VAL) was down, falling 55% to $1.05 amid a steep decline in the price of oil after OPEC members failed to reach a production agreement. Saudi Arabia also pledged to cut its oil prices and increase supply.

Commodities

In commodity news, oil traded down 20% to $33.18, while gold traded up 0.5% to $1,680.00.

Silver traded down 1.7% Monday to $16.97, while copper fell 3.6% to $2.469.

Euro zone

European shares were lower today. The eurozone’s STOXX 600 fell 6.1% the Spanish Ibex Index fell 6.4%, while Italy’s FTSE MIB Index dipped 9.7% Meanwhile, the German DAX dropped 6.5%, and the French CAC 40 fell 6.6% while UK shares fell 6%.

Economics

The Treasury is set to auction 3-and 6-month bills at 11:30 a.m. ET.

The TD Ameritrade Investor Movement Index for February is scheduled for release at 12:30 p.m. ET.

 

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