Stocks ended sharply lower on Tuesday as the selloff in oil continued for a second day.
Oil prices plunged to below zero for the first time ever on Monday as storage tanks were nearly full amid a collapse in demand due to the coronavirus pandemic.
Oil contracts expiring Tuesday settled in positive territory on Tuesday after President Donald Trump said his administration was working on a plan for funds to be made available for the oil industry.
“We will never let the great U.S. Oil & Gas Industry down,” Trump said in a tweet on Tuesday. “I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!”
West Texas Intermediate crude contracts for June settled down 43% to $11.57 a barrel.
"The pendulum is swinging from the opposite extreme of the peak oil craze about 10 years ago. This price slump is definitely a reaction to the fact that the world is running out of places to store the excess supply of oil," said David Trainer, chief executive of New Constructs, an investment research firm based in Nashville.
"But, it is still a knee jerk reaction - as soon as the economy gets going again, oil demand will bring prices closer to normal."
Trump said late Monday he might block imports from Saudi Arabia in order to stem the flow of cheap crude into the U.S., the world's biggest economy.
"The problem is no one is driving a car anywhere in the world, essentially. ... Factories are closed, businesses are closed," Trump told reporters in Washington.
"We had really a lot of energy to start off with, oil in particular, and then all of a sudden they lost 40%, 50% of their market," he added, referring to estimates of the fall in global demand.
Two other developments also weighed on investor sentiment: 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,” the virus.
And the U.S. was monitoring intelligence reports that suggested North Korean leader Kim Jong-Un was gravely ill following a surgery.
The Dow Jones Industrial Average finished down 631 points, or 2.67%, to 23,018 and the S&P 500 fell 3.07%. The Nasdaq was down 3.48% after tech stocks such as Alphabet (GOOGL) - Get Report and Facebook (FB) - Get Report fell sharply.
Shares of International Business Machines (IBM) - Get Report were a leading laggard on the Dow 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.
Coca-Cola (KO) - Get Report posted stronger-than-expected first-quarter earnings but pulled its full-year profit guidance as the impact of sports and stadium closures from the coronavirus pandemic hit near-term sales prospects.
Lockheed Martin (LMT) - Get Report reported stronger-than-expected first-quarter earnings, but with the coronavirus now having an effect, the defense-and-aerospace giant lowered its 2020 revenue estimate.
Meanwhile, Reuters reported that a U.S. labor and activist coalition said Amazon (AMZN) - Get Report employees would take off work starting Tuesday to draw attention to what it says are unsafe conditions at warehouses during the coronavirus pandemic.
Investors looked past indications that Congress was close to signing a relief bill for small business impacted by the pandemic.