For the second time this week, equity futures retreated as a drop in oil prices put added pressure on energy stocks, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
Persistent oversupply and collapsing global demand for oil put increased strain on U.S. energy sector stocks.
Oil majors Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX) slipped about 3% as prices tumbled. West Texas Intermediate crude fell 2% to trade at $19.70 a barrel while Brent crude — the international benchmark — fell 3.5% to $28.55 a barrel.
First-quarter earnings also added pressure to stock futures. JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC) kicked off the earnings season Tuesday by reporting a slump in quarterly profits and setting aside billions of dollars to cover potential loan defaults.
Goldman Sachs Group Inc. (NYSE: GS) shares were down nearly 2% after reporting a 41% drop in earnings and a 10% decline in revenue. Bank of America Corp. (NYSE: BAC) shares fell 2.6% after it reported a 45% drop in Q1 profit on Wednesday.
With dire forecasts of the biggest economic slump this year since the Great Depression, analysts expect earnings for S&P 500 firms to slide 12.3% in the first quarter and 23.6% in the second, according to IBES estimates from Refinitiv.
As of 9:20 a.m. EDT, Dow Jones futures were down 2.4%. S&P 500 futures dropped 2.7%, and Nasdaq Composite futures fell by 2%.
Stocks to Watch Today
Teledoc Health Inc. (NYSE: TDOC) — The virtual health care provider offered a glimpse into its Q1 financial results. The company said it expects a $50 million increase in quarterly revenue and a 70% growth in visits compared to the first quarter of 2019. Shares of Teledoc Health were up 4.8%.
JCPenney Co. Inc. (NYSE: JCP) — Shares of the department store chain dropped nearly 15% on news the company is exploring bankruptcy. All 850 of its stores have been closed because of the coronavirus spread causing concern it won’t be able to pay upcoming debt payments.
Aphria Inc. (NYSE: APHA) — The cannabis company reported a 54% increase in adult-use cannabis sales in its third quarter. It also said its revenues were $55.6 million — a 65% increase from the previous quarter. Shares of Aphria were up 22% in premarket trading.
Treasury, Airlines Agree on Aid
Ten of the 12 largest airlines have agreed in principle with the federal government on financial assistance to prevent layoffs.
The Wall Street Journal said United Airlines Holdings Inc. (Nasdaq: UAL), Delta Air Lines Inc. (NYSE: DAL), American Airlines Group Inc. (Nasdaq: AAL) and Southwest Airlines Co. (Nasdaq: LUV) have all agreed to receive assistance from the $2.2 trillion coronavirus relief package passed last month.
Negotiations with other airlines are ongoing, according to Treasury Secretary Steven Mnuchin.
United, Delta, American and Southwest were all trading higher in premarket trading.
China Reaffirms Support for WHO as Trump Pulls Funding
On Tuesday, U.S. President Donald Trump decided to temporarily halt funding to the World Health Organization over its response to the COVID-19 spread.
According to Bloomberg, Chinese officials have “serious concerns” about the funding halt and said it will continue to support the organization.
Airbnb Secures $1 Billion Loan from Investors
Home-sharing marketplace Airbnb is getting a $1 billion loan from institutional investors, bringing its total funding since the COVID-19 outbreak to $2 billion.
According to The Wall Street Journal, the company is getting a five-year loan with an interest rate of 7.5% as it battles a steep decline in travel due to the global pandemic.
What We’re Reading
4 Stocks to Buy With Your Stimulus Check (Money & Markets)
Why Dairy Farmers Across America Are Dumping Their Milk (CNN Business)
‘Worst Recession Most of Us Will Ever See in Our Lifetimes’ Coming (Money & Markets)
Earnings Report
Here are the companies releasing earnings reports today:
Bank of America Corp. (NYSE: BAC)
Citigroup Inc. (NYSE: C)
Goldman Sachs Group Inc. (NYSE: GS)
PNC Financial Services Group Inc. (NYSE: PNC)
UnitedHealth Group Inc. (NYSE: UNH)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.