Stocks Moving Premarket: Exxon Mobil, Halliburton, Shake Shack - Barron's

It’s a rocky Monday for investors. Oil markets remained in turmoil and the major U.S stock indexes opened lower. Investors waited for first-quarter results detailing how companies’ financials fared as the coronavirus pandemic shut down much of the economy.

The Dow Jones Industrial Average fell 241 points, or 1%, the S&P 500 lost 0.6%, and the Nasdaq Composite was about even. All three indexes rallied on Friday, capping gains of at least 15% over the past two weeks.

The first-quarter results will largely reflect a pre-coronavirus world. And given the unpredictability of the virus’s impact and its duration, companies will be loath to offer concrete forecasts for the rest of 2020. That means investors will be particularly focused on managements’ tone and the words they choose to use to describe their businesses this earnings season.

“The bottom-up news may dominate now, with the focus more on company statements than the reported numbers,” said Ian Williams, economics and strategy research analyst at Peel Hunt in London.

Most Asian markets retreated Monday, with the Nikkei 225 ending 1.1% lower in Tokyo and the Kospi Composite losing 0.8% in Seoul. The Shanghai Composite, however, rose 0.5% after the People’s Bank of China cut the one-year lending rate by 20 basis points.

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In Europe, however, the Stoxx Europe 600 index was up 0.3% on Monday after rising 7.9% over the last two weeks. The German DAX was about flat, the French CAC 40 ticked up 0.1%, and the U.K.’s FTSE 100 index slipped 0.1%.

Price changes in so-called haven assets were modest. Gold rose 0.7% to $1,710.60 an ounce. The yield on the 10-year U.S. Treasury note fell 4 basis points, or hundredths of a percentage point, to 0.618%, as the price of the securities ticked up. The U.S. Dollar Index (DXY)—which measures the greenback against a basket of other currencies—fell less than 0.1%.

Moves in U.S. and global oil markets were far more dramatic. Crude prices plunged, with the price of West Texas Intermediate falling to more than two-decade lows due to weakened demand and concern about a lack of storage space.

May futures tied to the U.S. benchmark were down 42%, to $10.66 a barrel. That contract expires Tuesday, and traders appear to be selling before they’ll need to take physical delivery of the oil. The June contract was off 8.7%, to $22.79 a barrel, by comparison. And prices were higher farther along the futures curve, suggesting that traders expect oil demand to rebound or supply cuts to deepen by later this year.

Brent crude, the international price benchmark, was down 5.1% at $26.66.

The drop in oil prices dragged down shares of already beaten-up oil companies. Exxon Mobil (XOM) stock dropped 1.9% and Chevron (CVX) stock fell 1.1%.

Smaller and less diversified producers suffered more: Occidental Petroleum (OXY) shares were down 5.3%, for instance. Halliburton (HAL), an oil-field-services provider, saw its shares rise 3.4% after reporting better-than-expected results on Monday morning. Management warned that activity will continue to plunge in the second quarter.

Other companies making moves on Monday include Shake Shack (SHAK), which saw shares rise 6.8% after announcing that it will return a $10 million loan it received under the Cares Act. Along with other large restaurant chains, it faced criticism for taking loans intended for small businesses. Shake Shack said it was able to raise $150 million in an equity offering.

DuPont de Nemours (DD) preannounced its first-quarter results on Monday. Numbers for that period easily beat expectations, but the chemical giant also suspended its full-year 2020 financial guidance, citing the effect of the coronavirus pandemic on demand for its products. DuPont stock rose 5%.

Wynn Resorts (WYNN) shares dropped 2% after chief executive Matt Maddox called for reopening the Las Vegas Strip in mid-May, while also providing a 23-page plan for safely doing so.

Discussions about reopening the U.S. economy continue, with a key question being the lack of testing conducted so far. At the same time, lawmakers are seeking to provide relief for businesses and individuals hurt by shutdowns put in place to slow the virus’s spread. Lawmakers said over the weekend they are close to a deal to add more cash to the Cares Act fund for small-business loans, which ran out of money last week.

Europe’s slow and relatively uncoordinated reopening continues, with Germany on Monday allowing small shops to take in customers.

Write to Nicholas Jasinski at nicholas.jasinski@barrons.com, Carleton English at carleton.english@dowjones.com and Steve Goldstein at steven.goldstein@wsj.com

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https://www.barrons.com/articles/stocks-moving-premarket-exxon-mobil-halliburton-shake-shack-51587385847

2020-04-20 15:34:00Z
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