US stocks tumble on worsening economic data and falling oil prices: April 15, 2020

By CNN Business

Updated 4:22 p.m. ET, April 15, 2020
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4:22 p.m. ET, April 15, 2020

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4:19 p.m. ET, April 15, 2020

Dow and S&P 500 log worst day since April 1

From CNN Business' Anneken Tappe

US stocks closed lower on Wednesday, after weak economic data and earnings weighed on the market all day.

Energy stocks led losses, after oil settled below $20 a barrel for the first time since 2002.

The Dow finished down 1.9%, or 445 points, and the S&P 500 fell 2.2%.It was the worst day for the two indexes since April 1.

The Dow is once again 20% below February's peak. The index fell into a bear market in March but then rallied back. Whether the Dow has emerged from bear market territory, however, remains to be seen in the coming months.

The Nasdaq Composite broke a four-day winning streak, its longest since early February. The index closed down 1.4%.

3:24 p.m. ET, April 15, 2020

Oil finishes below $20 for the first time since 2002

From CNN Business' Matt Egan

Sub-$20 oil has arrived -- despite President Donald Trump's intervention in the energy market.

US crude tumbled fell 1% to finish at $19.87 a barrel on Wednesday. It's the first time oil has closed below $20 since February 2002.

Crude spiked above $28 on April 3 after Trump signaled massive production cuts by Saudi Arabia and Russia. those two nations eventually delivered record-setting cuts by OPEC+, prompting Trump to take a victory lap.

Yet oil has since plunged 30% from those April 3 highs now that it's become clear the supply glut is too big for even OPEC to erase. Travel restrictions put in place to fight the coronavirus pandemic have caused a startling collapse in oil demand, leading barrels to pile up at an unprecedented pace.

The number of crude barrels in commercial storage spiked in the latest week by the most on record, a new report released Wednesday showed.

That oil glut has driven crude prices down by a stunning 69% since their January peak of $63.27 a barrel.

At current levels, many high-cost US shale companies will be forced to shut down production. Some will not survive the crash.

4:00 p.m. ET, April 15, 2020

Another 5.1 million jobless claims are expected tomorrow

From CNN Business' Anneken Tappe

The plight of the American worker continues.

Tomorrow's economic data is expected to show another 5.1 million people filed for first-time unemployment claims in the week ended April 11.

That would bring initial claims to nearly 22 million over the past month as the coronavirus pandemic is forcing businesses to remain closed.

Read more about the US jobs market here.

1:54 p.m. ET, April 15, 2020

Epic supply glut: Oil barrels are piling up at a record pace

From CNN Business' Matt Egan

The coronavirus pandemic is causing oil barrels to pile up at an unprecedented rate.

The amount of oil in commercial storage skyrocketed by 19.2 million barrels last week, according to the US Energy Information Administration.

It was easily the biggest one-week build since EIA weekly records began in 1982.

The oil market has been clobbered by the coronavirus crisis, with US crude plunging to a fresh 18-year low of $19.20 a barrel Wednesday. That's despite the record-setting production cuts announced by OPEC+.

Crude stockpiles are now above 500 million barrels for the first time since June 2017, according to ClipperData.

That's despite the fact that US oil imports dropped, as did domestic oil production -- part of what will likely be a sharp drop in output.

The core issue: Demand collapsed at a faster pace because of the health restrictions that have forced flight cancellations and work-from-home requirements.

So refinery activity plunged to 12-year lows, as there simply wasn't a need to churn out more jet fuel and motor gasoline.

“As long as the virus-related containment measures remain in place, product demand should remain weak," Capital Economics wrote in a note Wednesday.

1:23 p.m. ET, April 15, 2020

Stocks pull back from lows in early afternoon

From CNN Business' Anneken Tappe

Stocks are still in the red in the early afternoon, but they have bounced back from the worst lows of the day.

Still, this morning's negative economic data weighed heavily on investor sentiment. Energy stocks are faring the worst in the S&P 500, as oil prices keep sliding further.

The S&P was down 1.9%, while the Dow was 1.7%, or some 400 points, lower.

The Nasdaq Composite was down 1.3%.

1:21 p.m. ET, April 15, 2020

Beware the rebound, we might not have seen the bottom yet, investor warns

From CNN Business' Anneken Tappe

Stocks have rebounded from the lows of late March. But it will be months before we know for sure whether stocks have truly bottomed out and the bear market may be over.

"Whether the bottom is in or not really depends on your view on the recovery," Krishna Memani, former vice chairman of investments at Invesco, told Alison Kosik in the CNN Business' digital live show Markets Now.

If there is a relapse with a spike in a new coronavirus cases after the economy reopens, confidence could wane again.

That said, a longer term view that factors in an eventual vaccine means that stock valuations look attractive right now, Memani said.

"Two, three years out I feel very confident that we'll be in a better shape than we are now," he added. But, "if you're putting money in now because you think this problem is solved, that is premature."

1:15 p.m. ET, April 15, 2020

How Shake Shack adapted its business model to function during coronavirus

From CNN Business' Anneken Tappe

Fast casual burger chain Shake Shack has made changes to its business model to keep open during the coronavirus outbreak.

Shake Shack, which didn't have drive-throughs at any of its stores, has now turned nearly all of its restaurants remaining open into that model, said Randy Garutti, CEO of Shake Shack, on the CNN Business digital live show Markets Now.

Shake Shack is expecting that more preordering, pickup and delivery will eventually bring its customers back to eat inside its restaurants in a safe way.

The company has applied for a Paycheck Protection Program (PPP) loan from the government to keep its teams employed, and has drawn on a revolving credit facility to get prepared.

"The most important thing is to say thanks to our team," Garutti said. "We're not talking broadly enough about how essential restaurant workers are."

1:16 p.m. ET, April 15, 2020

Recession? Yes. Depression? No, says economist

From CNN Business' Anneken Tappe

Coronavirus has slammed the US economy. GDP is expected to be sharply negative in the second quarter and economic data from March and April are pointing to a steep decline in activity.

"I certainly think we're already in a recession," Lindsey Piegza, chief economist at Stiefel, told Alison Kosik on CNN Business' digital live show Markets Now.

How bad it will get will depends mostly on the depth and duration of this shutdown. But could America face another depression?

"I think we can avoid that as long as the economy begins reopening by May," Piegza said.If it goes longer than that, we could be "in a very dire situation."

Piegza says she expects a more U-shaped, rather than V-shaped recovery, with a slightly more prolonged recession. The reopening of the economy will likely be staggered, and it will likely take some time until consumer return to their pre-coronavirus behavior.

"Even after businesses reopen it’s going to take time for companies to reconnect with consumers," she said.

All of that will delay a rebound in the economy.