Oil Prices, IBM, Netflix, Hertz and Immigration - 5 Things You Must Know Tuesday

Stock futures are weaker, a day after oil prices plunged to below zero for the first time ever; IBM posts a sales decline and withdraws guidance, Netflix and Coca-Cola report earnings.
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Here are five things you must know for Tuesday, April 21:

1. -- Stock Futures Point Lower Amid Oil Turmoil

Stock futures pointed to a weaker start for Wall Street Tuesday, a day after oil prices plunged to below zero for the first time ever as storage tanks were nearly full amid a collapse in demand due to the coronavirus pandemic.

Oil contracts expiring Tuesday remained in negative territory while futures for the June contract were trading around $16 a barrel.

“We could merely be in the eye of the hurricane as the epicenters of its rage remain centered around demand devastation and crude oil oversupply,” said Stephen Innes of AxiCorp.

Two other developments also weighed on investor sentiment: President Donald Trump said he would sign an executive order temporarily suspending immigration into the U.S. to protect jobs “in light of the attack from the Invisible Enemy,” and the U.S. was monitoring intelligence reports that suggested North Korean leader Kim Jong Un was gravely ill following a previous surgery.

Contracts linked to the Dow Jones Industrial Average fell 532 points, futures for the S&P 500 were down 48 points and Nasdaq futures declined 83 points.

Stocks slumped on Monday following the historic plunge in oil prices. The Dow dropped 592 points, or 2.44%, pulled down by losses in energy stocks as the price of oil plunged to negative $37 a barrel. The S&P 500 declined 1.79% and the Nasdaq Composite fell 1.03%.

The economic calendar Tuesday includes Existing Home Sales for March at 10 a.m. ET.

2. -- IBM Posts Sales Decline and Withdraws Guidance

Shares of International Business Machines  (IBM) - Get Report were falling in premarket trading Tuesday after Big Blue reported a decline in first-quarter sales and withdrew its earnings guidance for the full year because of uncertainty caused by the coronavirus pandemic.

IBM reported adjusted first-quarter earnings of $1.84 a share, down from $2.25 a year earlier but ahead of analysts' estimates of $1.81.

Sales in the period fell to $17.57 billion from $18.18 billion a year earlier and missed forecasts of $17.59 billion.

Total cloud revenue at IBM, which includes results from its Red Hat subsidiary, rose 19% in the period to $5.4 billion.

As for withdrawing 2020 guidance, new IBM CEO Arvind Krishna said on a conference call it was a "tough decision" but "these are unprecedented times, and this quarter is not the time to declare we have clarity - that does not benefit us, and it does not benefit you as investors and analysts.”

IBM had guided in January for 2020 earnings of “at least” $13.35 a share.

The stock was down 4.58% in premarket trading Tuesday to $114.90.

3. -- Netflix, Coca-Cola and Chipotle Report Earnings

Coca-Cola  (KO) - Get Report earned 51 cents a share on an adjusted basis in the first quarter, 7 cents ahead of estimates, but pulled its full-year profit guidance as the impact of sports and stadium closures from the coronavirus pandemic hits near-term sales prospects.

The stock dipped slightly to $46.50.

Earnings reports are also expected Tuesday from Netflix  (NFLX) - Get Report, Philip Morris  (PM) - Get Report, JetBlue Airways  (JBLU) - Get Report, Travelers  (TRV) - Get Report, Chipotle Mexican Grill  (CMG) - Get Report, Snap  (SNAP) - Get Report and Texas Instruments  (TXN) - Get Report.

4. -- Coronavirus - The Latest

The number of confirmed global cases of the coronavirus has risen to 2,480,749, according to the Johns Hopkins Center for Systems Science and Engineering, and deaths increased to 170,418.

The U.S. has 787,960 cases of the coronavirus, the most in the world, according to Johns Hopkins CSSE. Deaths in the U.S. have risen to 42,364, also the most in the world.

Donald Trump's announcement that he would sign an executive order temporarily suspending immigration came in a tweet late Monday.

"In light of the attack from the Invisible Enemy," Trump said referring to the coronavirus, "as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!"

The president didn't offer specifics, but the order wouldn’t make substantial changes to current U.S. policy. Even without an executive order, the administration already has all but ceased nearly every form of immigration, The Wall Street Journal noted.

The Treasury Department said it issued $2.9 billion in aid to passenger airlines on Monday. The Treasury said assistance was handed out to two large airlines and 54 smaller passenger carriers, and additional aid would be disbursed on a rolling basis.

Agreements also were reached with six large airlines: American Airlines  (AAL) - Get Report, Delta Air Lines  (DAL) - Get Report, Southwest Airlines  (LUV.) , United Airlines  (UAL) - Get Report, Spirit Airlines  (SAVE) - Get Report and Allegiant Air, which is owned by Allegiant Travel  (ALGT) - Get Report.

5. -- Hertz to Lay Off 10,000 Workers

Hertz Global Holdings  (HTZ) - Get Report, the U.S. car rental company, said it would lay off 10,000 employees in North America as it looks to cut costs amid a downturn in business during the coronavirus pandemic.

Hertz, in a filing with the Securities and Exchange Commission, said it would incur costs of $30 million related to the layoffs, which began effective April 14 for nonunion workers and April 21 for union workers.

The company had about 38,000 as of the end of 2019.

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