Amid the worsening of the Coronavirus crisis, and the lack of agreement on a stimulus package for the US economy, the financial and oil markets are in a state of fluctuation.
On Wall Street, US stocks fell, while the only gainer was the “Nasdaq” index, and oil returned to gains benefiting from the storm “Zeta”.
The Dow Jones Industrial Average and the Standard & Poor’s 500 Index retreated due to disappointing business results and diminished hope for a stimulus package ahead of the US elections.
While the “Nasdaq Composite” index rose ahead of the announcement of the results of major technology companies.
And US stocks closed unchanged Tuesday, amid deteriorating investor confidence after the White House said that an agreement on a package to mitigate the repercussions of Covid-19 may come within “weeks”, which means that it is unlikely to happen before the November 3rd elections.
But the “Nasdaq”, which is rich in technology stocks, rose with the rise of Microsoft shares before the announcement of its results scheduled for later Tuesday, and the shares of heavy technology companies provided some support to “Standard & Poor’s”.
Eli Lilly Pharmaceuticals shares fell after the quarterly profits were negatively affected by the costs of developing a treatment for Covid-19 disease and after a trial on a vaccine that did not lead to an improvement in the condition of hospital inmates.
“This downturn that we’re seeing is little more than a risk aversion move given that an additional stimulus package has been put aside … that has created some disappointment,” said Kevin Flanagan, director of fixed income strategy at Wisdom Tree Investments.
According to unofficial data, the “Dow” retreated 221.37 points, equivalent to 0.8%, to 27464.01 points, “Standard & Poor’s” lost 10.23 points, or 0.30%, to score 3390.74 points, and the “Nasdaq” rose 72.41 points, or 0.64%, to reach 11431.35 points.
The rise of oil
Crude closed higher on Tuesday as companies halted some US oil production in the Gulf of Mexico ahead of a storm approaching the region, but growing coronavirus infections and increasing Libyan supply curbed gains.
Companies like BP, Chevron, and Equinor have evacuated platforms or closed facilities. Producers have so far halted 16%, equivalent to 294,000 barrels per day, of oil production due to Storm Zeta, which was a hurricane on Monday but weakened to a tropical storm early Tuesday, according to the US National Hurricane Center.
Brent crude rose 75 cents, equivalent to 1.9%, to determine the settlement price at 41.21 dollars a barrel. US crude added $ 1.01, or 2.6%, to $ 39.57 at the close. Both contracts were down more than 3% on Monday.
But the price boom resulting from the storm may be short-lived, as demand is expected to renew weakness in light of the growing number of virus cases, according to Reuters.
“We have a lot of vulnerabilities … no vaccine, no stimulus, and the very realistic possibility of a contested election whose outcome within days, a stock market will not react positively to that situation,” said Bob Yoger, director of energy contracts at Mizuho.
Libya’s production is expected to recover to 1 million barrels per day in the coming weeks, which will complicate efforts by other OPEC members and their allies to reduce supply.
Data from the American Petroleum Institute on Tuesday showed that US stocks of crude oil and gasoline increased last week.
Crude inventories increased by 4.6 million barrels over the week ending October 23 to about 495.2 million barrels, while analysts had expected a decline of 1.2 million barrels.
Crude stocks at the delivery point in Cushing, Oklahoma, rose 136 thousand million barrels.
According to figures from the Petroleum Institute, the consumption of crude refineries grew by 176,000 barrels per day.
Gasoline stocks increased by 2.6 million barrels, while analysts in a Reuters poll expected a decline of 961,000 barrels.
According to the data, US imports of crude oil rose by 436 thousand barrels per day last week.
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