ENERGY (-47%) The S&P energy sector has plunged more 47% in the past month. The price of oil continues a steady decline toward $30 per barrel. Saudi Arabia on Wednesday directed its oil company Aramco to increase its maximum production capacity as it squared off with Russia, even as airlines cut flights, shippers dial back deliveries of goods and people are being told to stay home. In its monthly report Wednesday, OPEC revised down its projections for global oil demand growth this year, while raising projections for supply. That is a recipe for plunging energy prices and layoffs in the oil patch. Shares in Exxon are down about 38% in the past 30 days. Already, energy giants like Exxon and Occidental Petroleum have cut spending. The latter cut its dividend by 86% Tuesday to save cash.
FINANCE AND BANKING (-33%) Banks have been punished by falling interest rates. Interest payments on loans are a major source of revenue. The Fed last week lowered its main borrowing rate by half a point to combat the economic drag from the outbreak. Analysts suspect another cut may be coming soon. But there is also the anticipation of slowing global economic growth, which was already underway before the pandemic hit. That would mean slowing business, and fewer fees, for banks that employ millions of people. On Thursday, the U.S. Federal Reserve injected $500 billion into short-term lending markets to address disruptions in the Treasury market. It is also broadening its ongoing purchases of Treasurys to include longer-term bonds. The action, being led by the New York Fed, is intended to keep credit markets functioning and ensure that banks can continue to provide loans to businesses and other borrowers across the economy.
INDUSTRY AND MANUFACTURING (-32%) Manufacturers are also taking a hit as businesses pull back on orders for goods due to the impact of the spreading coronavirus. Companies like Ingersoll Rand, which makes a wide range of industrial products including many used by the oil and gas industry, has seen its shares lose a third of their value in the past 30 days. Major manufactures like Caterpillar and Deere and just beginning to stabilize from a trade war between the world's two largest economies, China and the United States. Caterpillar on Thursday reported broad declines in retail sales for the three-month rolling period ending in February, with worldwide sales slumping 11% following a 7% decline from January.
DISCRETIONARY SPENDING (-27%) The broad sector that covers everything from the sale of a Big Mac, a Barbie doll, Gap jeans or a Disneyland vacation — is taking a beating as people cancel trips, avoid the mall or shut in. Airlines and cruise ships have been the most notable losers amid government travel bans, infections on cruise ships and a sudden aversion to boarding a commercial aircraft. Shares in airlines are down more than 40% in the past month and cruise ships stocks, which are grouped with resorts and hotels, are down about 50%. Princess Cruises, which had one of its ships quarantined off the coast of Japan last month, said Thursday that it would suspend global operations through early May. Starbucks stores in the U.S. and Canada may become drive-thru only while others could limit the number of people allowed inside, the company said Thursday. Shares in the coffee chain plunged 7% Thursday to a 52-week low and are down almost 30% in the past month. And more bad news for anyone thinking they would self-quarantine on the couch and watch their favorite team: the NHL is following the NBA’s lead and suspending its season amid the coronavirus outbreak. Major League Baseball is delaying the start of its season by at least two weeks. And the NCAA canceled the men's and women's Division I basketball tournaments. And hold off on that Disneyland vacation: Disneyland Resort said it will close Disneyland Park and Disney California Adventure Park through the end of the month, though there have been no reported cases of the new virus. The announcement doesn't affect Disney World in Florida.
TECHNOLOGY (-26%) Technology companies have not been immune to the Wall Street coronavirus sell-off during the past 30 days. China manufactures a wide range of parts for U.S. tech companies, and when the country shut down most of its factories last month, it disrupted the supply chain and left companies without products to ship. Additionally, companies from every sector are likely trimming non-essential spending until the pandemic passes. That means fewer tech upgrades or overhauls, and individuals may pull back on spending as well for everything from iPhones to Xboxes. Alphabet, which owns Google, has lost about one-quarter of its value in the past month. Chipmaker Dell has seen its stock fall about 37% during the same stretch.