Stock market live Tuesday: Stocks fall for a second day, S&P 500 off 3%, oil drops below $12

Stocks came under pressure again as an unprecedented rout in oil prices deepened. The West Texas Intermediate contract for June delivery tumbled below $12 as demand evaporates. Investors also looked to a wave of corporate earnings to gauge the impact of the coronavirus pandemic. Here’s what happened:

• The Dow fell 631 points, or 2.67%, its worst daily performance since April 1 when it fell 4.44%
• Dow Impact: Apple had the most negative impact on the Dow, accounting for 58 points against the index.
• The S&P 500 fell 87 points, 3.07%, its worst daily performance since April 1 when it fell 4.41%
• SPY Impact: Microsoft had the most negative impact on the SPY, accounting for 0.54 points against the ETF.
• The Nasdaq Composite fell 298 points, 3.48%, its worst daily performance since April 1 when it fell 4.41%
• The Russell 2000 fell 2.33%, its fourth negative session in five
• DJ Transports fell 1.57%, its fourth negative session in five — Hayes

Stocks fell for a second day as the collapse in oil prices deepened. The Dow dropped about 630 points, dragged down by Merck & Co. and Boeing. The S&P 500 retreated about 3%%, bringing the week-to-date losses to 4.8%. The Nasdaq Composite dropped 3.4% as Amazon took a breather from its strong rally. — Li

Senate Democrats and Republicans on Tuesday agreed on another large relief package to support small businesses dealing with the economic fallout from Covid-19. The bipartisan agreement will provide $320 billion in additional funding for the Paycheck Protection Program, according to Senate Majority Leader Mitch McConnell. The PPP ran out of money last week as millions of small business owners flocked to apply for the prior $350 billion in taxpayer-backed, low-interest loans from the Small Business Administration. — Franck

U.S. Energy Secretary Dan Brouillette said on Tuesday afternoon that any financial support for energy companies amid falling oil prices would likely come from existing programs and not be a separate fund.”Having access to what Congress has already passed is the most logical step forward,” Brouillette said on “Power Lunch.”Brouillette also said he will be working with Congress to see if it is possible to expand the U.S. strategic oil reserve. President Donald Trump said in a tweet earlier Tuesday that “we will never let the great U.S. Oil & Gas Industry down.” — Pound

With roughly one hour left in the trading session, the Dow was headed for a two-day decline of more than 1,000 points as a historic decline in oil dented investor sentiment. The 30-stock average traded 587 points lower on Tuesday, or 2.5%, after dropping 592 points in the previous session. The S&P 500 slid 2.8% while the Nasdaq Composite traded 3.1% lower. —Imbert

West Texas Intermediate crude futures for June delivery dropped 43% to settle at $11.57 per barrel. Earlier it fell more than 60% to trade under $7 per barrel. The May contract settled at $10.01 per barrel. On Monday it fell below zero for the first time in history. However, as contracts approach expiration, trading volume is typically thin. – Stevens, Li

Data compiled by BofA Securities strategists showed investors of all kinds — retail, hedge funds and institutions — have been net buyers of equities since the market hit a low on March 23. Overall, hedge funds have added $1.7 billion in stocks since March 23 while institutions have increased their equity exposure by $1.624 billion. Retail investors have added $447 million in stocks. The S&P 500 has rallied more than 25% since late March as investors weigh the possibility of a peak in new coronavirus cases along with unprecedented stimulus from the Federal Reserve and U.S. lawmakers. —Imbert, Bloom

Shares of Walmart climbed 0.6% in afternoon trading, one of the only two stocks in the green in the Dow Jones Industrial Average. The retailer hit a 52-week high on Monday as it continues to benefit from consumers stalking up on staples amid the pandemic. The stock has risen 10% this year. — Li

About six stocks declined at the New York Stock Exchange for every advancer as market sentiment was dented once again by a historic plunge in oil prices. Overall, about 2,500 NYSE-listed stocks rose while 407 traded lower, FactSet data shows. —Imbert

The total market cap for the S&P 500 energy sector is roughly half that of tech giants Microsoft and Amazon as crude prices get decimated in historic fashion. Around 2 p.m., the energy sector’s total market cap was about $633 billion. Microsoft’s market value is about $1.3 billion while Amazon is worth roughly $1.2 billion. —Imbert, Francolla

West Texas Intermediate crude futures for June delivery, which is the more actively traded contract and therefore a better indication of how Wall Street views the price of oil, slipped 62% to $7.75 per barrel. Meanwhile, the May contract expiring Tuesday, climbed 123% to $8.60 per barrel. — Li

West Texas Intermediate tied to May delivery rebounded to trade higher on Tuesday, one day after plunging into negative territory for the first time in history. The contract, which expires today, rose to $8.50 less than an hour before the settle. The more actively traded June contract, on the other hand, plunged 46% to trade at $11.02. Traders fear that as storage fills, there will be nowhere to store oil. – Stevens

OneOk, ConocoPhillips, Occidental, Pioneer Natural Resources — Energy stocks struggled Tuesday as oil futures for June fell sharply. OneOK was one of the worst performing stocks in the S&P 500, plunging nearly 8%, after being downgraded to neutral from buy by Goldman Sachs. Occidental Petroleum fell 5.2%, while Pioneer Natural Resources slid 3% and ConocoPhillips lost 2.7%.

Beyond Meat — Shares of the alternative meat company popped nearly 6% on news that Starbucks will debut Beyond Meat products on its menu in China. The partnership with the world’s largest coffee chain marks Beyond’s entry into the Chinese market.

Hertz Global — Shares of the global car rental company sank 7% after it said it has laid off about 10,000 employees in North America to cut costs and offset the impact Covid-19 is having on its sales. The company said in a government filing that it has “experienced increased rental cancellations and declining forward bookings.”

Click here to read more about midday movers. — Fitzgerald

Shares of Salesforce and Oracle fell more than the broader market on Tuesday after tech giant IBM said it saw headwinds in its software segment in the first quarter because of Covid-19. IBM Chief Financial Officer James Kavanaugh said in an earnings call that the company had been on track to meet first-quarter estimates through February but a “pause” in client spending in March pressured performance. That was “most pronounced in our software business,” he said, “where the vast majority of transactions typically closed in the last two weeks of the quarter.” The so-called sympathy trade at Oracle and Salesforce, which also generate significant revenues via software and tech support, sent the equities down 4.4% and 7.9% respectively. — Franck

Wall Street analysts expect big things from Netflix when the streaming giant reports earnings Tuesday afternoon. “We expect Netflix to report 1Q results well above guidance, with over 10mn net subscriber additions, and provide initial guidance for 2Q ahead of FactSet Consensus, even accounting for management conservatism,” Goldman Sachs said in a note to clients. Other analysts agreed that Netflix will be well-positioned after Covid-19 as well. “In our view, the current environment may also pull forward adoption curves in markets where Netflix is currently underpenetrated, which would result in a benefit to Netflix with a duration beyond 1H:20, in our view,” Stifel said. — Bloom

Investors can count on warmer weather to curb the coronavirus pandemic and the market will reclaim its record highs by early next year, according to Marko Kolanovic, JPMorgan’s global head of macro quantitative and derivatives strategy. The strategist said Tuesday that a study published by the Department of Homeland Security Science and Technology links virus stability to sunlight, temperature and humidity. “The most striking finding in the document is that sunlight destroys the virus very quickly, within ~2 minutes,” Kolanovic said in a note Tuesday. “This may make sunlight exposure the most important factor to consider for a limited reopening of the economy, i.e., specific businesses and activities.” — Li

The major stock averages were headed for another day of steep losses by midday trading as a historic drop in crude prices continued to hamstring market sentiment. The Dow dropped more than 700 points, about 3%. The S&P 500 fell 3.3% while the Nasdaq traded about 4% lower. A further decline in the price of oil for June delivery in noontime trading weighed on stocks halfway through the session. Oil futures for June delivery sank 37% to $12.80 a barrel. — Imbert, Franck

The tech-software ETF IGV is down more than 4%, on pace for its worst day since April 1 when it lost 4.75%. IGV was led to the downside by Alteryx, Salesforce, Fortinet and Workday, which are all down 7% so far Tuesday. —Francolla

Shares of Amazon and Netflix fell 4% and 1.7%, respectively, as the tech duo’s strong comeback took a breather. Tuesday’s decline marked the second down day in seven for both companies. Amazon and Netflix rallied 17% and 29%, respectively, in the past month as they benefit from a surge in demand amid nationwide shutdowns during the coronavirus pandemic. — Li

President Donald Trump ordered Energy Secretary Dan Brouillette and Treasury Secretary Steven Mnuchin on Tuesday to put together a plan to get funding to the struggling U.S. oil and gas industries as a historic sell-off in crude continued. “I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!” Trump tweeted Tuesday morning.– Li

Trading in the United States Oil Fund, a popular exchange-traded security that tracks the price of oil, was briefly halted Tuesday before the opening bell. When it resumed trading, it plunged 20%. The halt came after USCF, the manager of the USO fund, said it was temporarily suspending the issuance of so-called creation baskets. — Stevens

Shares of IBM dropped more than 5% in morning trading after the company reported a 3.4% decline in revenue in the first quarter from a year earlier. It also withdrew full-year guidance given the uncertainty around the coronavirus pandemic. Three months ago, the company had forecast growth in revenue, earnings on an adjusted basis. — Li

• Oppenheimer raised its price target on Walmart to $145 from $125.
• Jefferies raised its price target on Amazon to $2,800 from $2,300.
• UBS downgraded Chewy to neutral from buy.
• Susquehanna upgraded Southwest to positive from neutral.
• Guggenheim upgraded O’Reilly Automotive to buy from neutral.
• UBS downgraded Eli Lily to neutral from buy.
• Argus initiated Lyft as buy.

CNBC Pro subscribers can read more here. — Bloom

Stocks opened with steep losses on Tuesday as the ongoing oil collapse weighed on sentiment. The Dow Jones Industrial Average fell more than 500 points, while the S&P 500 dipped 1.7%. The tech-heavy Nasdaq Composite is down 1.2% at the open, lifted by Amazon and Netflix. — Li

Sen. Chuck Schumer said Tuesday that he believes the Senate will pass an additional relief bill for small businesses later in the day. He said he spoke “well past midnight” with House Speaker Nancy Pelosi, White House chief of staff Mark Meadows and Treasury Secretary Steven Mnuchin, and that they “came to an agreement on just about every issue.” The government has been under pressure to replenish a fund allocated to small businesses as part of a Paycheck Protection Program program created by the $2.2 trillion relief bill. Those funds, which totaled $349 billion, ran out last week. – Lauren Hirsch

The dollar surged on Monday as investors rushed into safe haven asset amid a plunge in oil prices. The dollar index hit a high of 100.374, its highest level since April 8 when the index hit a high of 100.43. —Fitzgerald, Francolla

The U.S. 10-year Treasury yield hit a low of 0.567% on Tuesday, hitting its lowest level since March 10. Investors piled into bonds amid growing concerns over the global economy while crude and equity futures tumbled. —Imbert

Hayman Capital Management CIO Kyle Bass again warned about exchange traded funds that track oil prices. Bass asked on Twitter if the funds could trade in negative territory if oil futures further along the curve follow the May contract below $0. “If I were a major counterparty after yesterday’s session, I would demand more than 100% collateral,” Bass said. The United States Oil Fund, the largest oil ETF, fell roughly 18% on Tuesday. Bass said Monday on CNBC’s “Closing Bell” that retail investors should stay away from these funds and that he had short positions against some of them. — Pound

After the futures contract for the front month of West Texas International fell below zero on Monday, contracts for June dropped sharply in early trading on Tuesday. The WTI contract for June fell more than 23% to $15.57 per barrel, while internationaly benchmark crude dropped nearly 19% to $20.77 per barrel. The WTI futures contract for May, which fell into negative territory on Monday, was trading at negative $4 per barrel on Tuesday morning. The contract expires later on Tuesday. —Pound

The oil market is facing uncharted territory as the drop-off in demand, caused by the coronavirus pandemic, combined with rapidly filling storage, sent prices plunging into negative territory for the first time in history on Monday. And with only guesswork as to when stay-at-home ordinances might be lifted and when crude demand might pick up, traders warn that oil could continue to trade at extremely depressed levels. “If we have not recovered from COVID in July so that enough driving has come back and storage is full, then the price of crude oil is going to be zero,” RBN Energy’s Rusty Braziel told CNBC. He called Monday’s trading activity “insane,” and said that in his more than 40 years of trading he had “never seen anything like this.” On Monday, West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, meaning people would effectively pay to have the oil taken off their hands. —Stevens

The South Korean won dropped nearly 1% against the U.S. dollar after unconfirmed reports said North Korean leader Kim Jong Un was seriously ill. CNN reported Tuesday, citing unnamed U.S. officials, that Washington was “monitoring intelligence” that Kim is in “grave danger after a surgery.” Daily NK, a South Korean media outlet, said Kim was receiving treatment after undergoing a cardiovascular procedure on April 12. To be sure, Reuters reported, citing two government sources, that Kim was not gravely ill. —Imbert, Huang

IBM fell more than 5% in premarket trading after the company reported first-quarter results that showed a return to revenue declines amid the Covid-19 outbreak. Sales decreased 3.4% on an annualized basis in the first quarter as the company tried to revamp its operations so that employees to work remotely. One quarter ago, the company ended a streak of five consecutive quarters of falling revenues. It also withdrew full-year guidance given the uncertainty the of the coronavirus. —Franck

Wall Street headed for another lower open on Tuesday as oil’s historic decline showed no signs of ebbing. Dow Jones Industrial Average futures traded more than 400 points lower, or 1.8%. S&P 500 and Nasdaq 100 futures slid 1.4% and 0.8%, respectively. The May WTI contract was deep in negative territory, but more concerning for oil traders was the decline in later-month contracts. The June oil contract traded 18% lower at $16.67 per barrel. The sharp losses in oil raised more concern about the state of the global economy as the coronavirus pandemic ravages the economic outlook. —Imbert

With reporting from Yun Li, Gina Francolla, Eustance Huang, Michael Bloom and Jesse Pound.

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