Stocks Slide as Oil, Jobs Add to Global Worries
Wall Street was down in the dumps for a second day as investors fretted over an oil supply glut and the potential for a disappointing jobs report on Friday.
The S&P 500 was down 0.6%, the Dow Jones Industrial Average fell 0.56%, and the Nasdaq slid 0.79%. The Nasdaq was down for the ninth time in ten sessions, while the S&P 500 and Dow were down for the fourth time in five.
The energy sector spent the day deep in the red after domestic supplies increased faster than expected last week. Commodities stocks were also pressured after mining firms BHP Billiton (BHP) - Get Report and Vale (VALE) - Get Report were hit with a multibillion-dollar lawsuit from the Brazilian government. Regulators demand the companies pay up to 155 billion reais ($43.6 billion) to clean up a dam collapse believed to be the country's worst ever environmental disaster.
Major oilers such as Total (TOT) - Get Report , Royal Dutch Shell (RDS.A) , BP (BP) - Get Report , Chevron (CVX) - Get Report , and ConocoPhillips (COP) - Get Report were all lower, while the Energy Select Sector SPDR ETF (XLE) - Get Report slid 1.4%.
Crude prices ended the day slightly higher despite a weekly report from the Energy Information Administration showing U.S. stockpiles increased by 2.8 million barrels, more than twice as much as the 1.2 million barrels analysts expected. West Texas Intermediate crude oil closed 0.3% higher at $43.78 a barrel, paring earlier gains.
An unofficial reading on the labor market missed estimates by a wide mark and fueled worries ahead of the Friday jobs report. Private payrolls added 156,000 jobs in April, according to the ADP Employment Report. Analysts had expected 193,000 jobs to have been added last month, and the miss is a poor portent for the official nonfarm payrolls data at the end of the week.
"While we generally do not put a lot of stock in the ADP forecast, we do think the rather low forecast from ADP for April does suggest downside risk to Friday's number," RBS Securities analysts wrote in a note.
Weak factory activity out of China, downgraded growth expectations from Europe, and the Reserve Bank of Australia's decision to cut rates combined to spook investors on Tuesday. Wall Street's selloff triggered losses in international markets overnight.
In earnings news, CBS (CBS) - Get Report added 1.7% as ad sales during the Super Bowl broadcast helped to propel first-quarter earnings 20% higher. Overall revenue jumped 10% and beat estimates, while per-share revenue of $1.02 topped expectations by 8 cents.
Etsy (ETSY) - Get Report rose 5% after reporting a surprise profit in its its first quarter. Stronger demand for services sold to merchandisers on the site pushed the company to report a profit of a penny a share, better than an expected net loss of 2 cents a share. "Seller services" jumped nearly 60% from a year earlier.
Time Warner (TWX) increased 1.6% after growth at Turner Broadcasting and HBO boosted quarterly earnings. The media company said net income increased to $1.51 a share from $1.15 in the year-ago quarter. Adjusted earnings of $1.49 a share topped estimates of $1.29. Its Warner Brothers studio saw a 3% decline as its Batman v. Superman blockbuster failed to match strong showings from American Sniper and The Hobbit: Battle of the Five Armies in the year-ago quarter.
Tesla (TSLA) - Get Report slipped 4.2% after two C-suite executives resigned. Vice president of production Greg Reichow and vice president of manufacturing Josh Ensign will both leave the company. Shares initially took a tumble earlier in the session after investor Jim Chanos said in a CNBC interview that he was shorting the automaker.
