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US markets end lower amid historic drop in oil prices

21 Apr 2020 Evaluate

The US markets ended lower on Monday as traders cashed in on last week's gains amid lingering concerns about the economic impact of the ongoing coronavirus pandemic. An historic drop by the price of crude oil also weighed on the markets, with a crude futures contract turning negative for the first time ever. Plunging oil prices overshadowed optimism over signs of peak infections in parts of the world, including New York, and plans from Europe, notably Germany, to begin unwinding the recent global economic pause due to the pandemic. Meanwhile, Housing stocks showed a substantial move to the downside on the day, dragging the Philadelphia Housing Sector Index down by 4.3 percent. Significant weakness was also visible among commercial real estate stocks, as reflected by the 3.9 percent nosedive by the Dow Jones US Real Estate Index.

Investors also were bracing for the worst quarter for earnings since the 2008 financial crisis, unsurprisingly due to closures in response to the COVID-19 pandemic. Results this year for the first quarter were on track to decline 14.5% from a year ago. Though, New York Governor Andrew Cuomo reiterated his call for the federal government to help source vital reagents and other materials needed to start conducting antibody tests to help determine how many New Yorkers were infected with COVID-19, as part of the Empire State’s efforts to reopen its economy. Such testing served as a major cornerstone of Germany’s gradual restarting of its economy on Monday. Global infections of COVID-19 have exceeded 2.4 million, with more than 165,000 lives lost to the contagion that was first identified in China in December.

Dow Jones Industrial Average dropped 592.05 points or 2.44 percent to 23,650.44, Nasdaq fell 89.41 points 1.03 percent to 8,560.73 and S&P 500 was down by 51.4 points or 1.79 percent to 2,823.16.

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MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.

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