Dow Jones rallies 690 points despite oil prices sinking to 18-year low

A sign for Wall Street hangs outside at the New York Stock Exchange on Wall Street in New York City. Photo Courtesy: Wikipedia

March 30 (UPI) — U.S. stocks continued their rally on Wall Street Monday as they largely rebounded from losses experienced due to economic concerns regarding the COVID-19 pandemic.

The Dow Jones Industrial Average closed up 690.7 points, or 3.19 percent, while the S&P 500 rose 3.35 percent and the Nasdaq Composite climbed 3.62 percent.

Monday’s gains put the Dow up 20 percent from its lows amid the market sell-offs due to the coronavirus, while the S&P 500 has risen 17 percent from its lows and the Nasdaq recovered 13 percent.

Tech stocks led the market climb on Monday as Microsoft gained 7 percent, while Amazon and Google’s parent company Alphabet each rose about 3 percent.

Earlier Monday, oil prices slumped to an 18-year low on fears that the coronavirus pandemic could trigger a long-term collapse in demand and Saudi Arabia continued to saturate the market.

The international benchmark Brent crude fell by more than 7 percent to a low of $23.03 per barrel at its lowest point in overnight trading — its lowest price since 2002.

The U.S. benchmark West Texas Intermediate fell below $20 per barrel, also dropping by more than 7 percent.

Overall, oil prices have plummeted by two-thirds this year.

The dip in oil prices came after President Donald Trump on Sunday backed off his stated goal of getting the U.S. economy back up and running by Easter, and instead extended social distancing guidelines until the end of April.

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Concerns the United States could be in an extended period of reduced oil demand were also deepened when White House medical adviser Dr. Anthony Fauci warned Sunday that as many as 200,000 Americans could die in the pandemic.

Saudi Arabia has given no indication of relenting in its strategy of flooding the market with oil in a price war with rival producer Russia, despite pressure to do so from the United States.

In response to falling prices and quickly diminishing storage capacity, global producers are shutting down rigs at the quickest pace in 35 years, especially in landlocked areas of the United States, where the shale oil industry is seen as especially vulnerable to the negative market forces.

The Dow, which lost several hundred points on Friday to end a three-day winning streak, has been volatile over the last month but notched major gains last week — its greatest single-week gain, in fact, since 1938. Trump signed a $2 trillion relief bill on Friday, which takes several economic safety and stimulus measures.

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