Stocks extend drop-off as oil markets remain negative

Stock markets on Monday opened to significant drops, extending their Monday falls, as oil markets remained in disarray and in some cases had negative prices.

The Dow Jones Industrial Average was down 550 points, or 2.4 percent, in early trading, while the S&P 500 dropped 55 points, or 1.9 percent.

On Monday, markets closed down a similar amount, with the Dow dropping 592 points and the S&P dropping 51 points.

The latest sell-off comes at an unprecedented moment for oil markets. With lockdowns from the coronavirus pandemic in full swing, air travel curtailed and road commuting down, demand for oil has fallen off a cliff.

On Monday, futures contracts to buy oil in May turned negative for the first time in history as potential buyers ran out of places to store oil. They remained in negative territory Tuesday, the last day for trading May contracts, while oil futures for June dropped 30 percent.

In the meantime, the coronavirus pandemic and its response continue to hit the real economy in significant ways. Car rental company Hertz said Monday it would lay off 10,000 people in North America, over a quarter of its workforce. As companies began to report earnings, Coca-Cola said its global volumes were down 25 percent.