US stocks closed mixed as investors mull the global economic-reopening situation
- US stock indexes closed mixed on Monday as investors mulled the risks of unwinding months-long lockdowns.
- Economists are warning of a prolonged economic downturn should state reopenings fuel a second wave of coronavirus cases.
- West Texas Intermediate crude oil climbed as much as 3% before sliding to a session loss after Saudi Arabia said it would cut production by an extra 1 million barrels per day in June.
- Goldman Sachs projected a V-shaped recovery for crude prices through 2020.
- Watch major indexes update live here.
US equities closed mixed on Monday as investors weighed the benefits of reopening economies and returning to pre-virus norms.
Traders are considering efforts by nations who are in the process of slowly unwinding months-long lockdowns. Several states have begun resuming regular business activity to avoid additional layoffs and keep firms afloat. Some view the move as necessary to avoid a prolonged recession, while others see it as risking a dangerous second wave of coronavirus cases.
The UK announced the first steps of its reopening plan on Sunday, telling citizens to return to their jobs if working from home is impossible. Markets also mulled an uptick in cases in South Korea, one of the nations to most effectively counter early coronavirus outbreaks.
Here's where US indexes stood at the 4 p.m. ET market closed on Monday:
- S&P 500: 2,930.19, up 0.01%
- Dow Jones industrial average: 24,221.99, down 0.45% (109 points)
- Nasdaq composite: 9,192.34, up 0.78%
All three indexes fell at the open before paring their declines throughout the day. The S&P 500 and Nasdaq composite turned green early in the afternoon and closed there, while the Dow finished the day slightly lower.
The Cboe Volatility index — or VIX, which measures volatility expectations with S&P 500 options contracts — slid to its lowest point since late-February, indicating virus-fueled price swings have mostly cooled.
Airline stocks including United Airlines, Delta Air Lines, and American Airlines tumbled after United pulled back on a Friday debt offering. AMC Entertainment Holdings soared as much as 56% on reports that Amazon might invest in the ailing movie theater chain.
West Texas Intermediate crude oil rose as much as 3.4% as Saudi Arabia said it will cut production by an additional 1 million barrels per day in June. The commodity settled roughly 0.3% lower on the day. Brent crude, oil's international benchmark, rose as much as 1.6% before closing down 2.8%.
Goldman Sachs sees oil prices staging a V-shaped recovery through the year while supply takes longer to recuperate. Demand for jet fuel is unlikely to return to past highs, Jeff Currie, head of global commodities research at Goldman, said in a Friday media briefing. The long-term damage to business-travel demand will keep demand below pre-virus levels until late 2022, Currie added.
Even as traders focus on the risks associated with rebooting economies, Bank of America forecasts the next stage in recovery will bring more uncertainty. The firm wrote Friday that the US is in the second of three recovery phases, having already experienced widespread shutdowns and begun a transition to reopening.
The third phase will feel "like a recession," the bank said, as a wave of bankruptcies and additional job cuts present new economic hurdles.
Monday's session follows a strong market uptrend to close out last week. Stocks gained on Friday as investors shrugged off a gloomy jobs report and focused on hopes for economic reopening.
The Labor Department announced Friday the US unemployment rate spiked to 14.7% in April as 20.5 million nonfarm payrolls were lost. The report brought unemployment to its highest level since World War II and near records seen during the Great Depression.
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