Morning Brief

What to watch today: Dow set to sink as oil prices plunge

BY THE NUMBERS

Dow futures were pointing to about a 500-point drop at Monday's open as the May futures contract on West Texas Intermediate crude was sinking more than 38% to around $11 per barrel. The May contract on WTI, the American oil benchmark, is set to expire Tuesday. The June contract was off over 11% to about $22 per barrel. Oil has been tanking on slumping demand as coronavirus mitigation measures have kept drivers off the roads. At the same time, crude storage facilities have been filling up rapidly. (CNBC)

The Dow Jones Industrial Average on Friday soared 704 points, or 3%, to its first closed above 24,000 since March 10. The S&P 500 closed 2.7% higher. The Nasdaq was up 1.4%. Friday's rally was fueled by hopes for a coronavirus therapeutic as a report said Gilead Sciences drug remdesivir showed some effectiveness in treating the coronavirus. (CNBC)

United Airlines on Monday reported a $2.1 billion pretax-loss in the first quarter as the coronavirus outbreak drove travel demand down to the lowest level in decades. (CNBC)

IN THE NEWS TODAY

Senate Democrats and Republicans are nearing a deal that could inject roughly $370 billion into loan programs for small businesses, a person familiar with the negotiations told CNBC. The talks come after the $349 billion Paycheck Protection Program, which offers forgivable loans to small businesses, ran out of money Thursday. (CNBC)

Shake Shack is returning a $10 million loan that it got through PPP. The restaurant chain said it was able to raise additional capital on its own. The burger chain said it had pursued the loan because the law stipulated that it was open to any restaurant location with no more than 500 employees, which describes the firm's 189 individual U.S. restaurants. (NBC News)

Starting this week, Texas is easing some of its coronavirus restrictions, allowing retailers to sell items for curbside pickup, resuming elective surgeries and reopening state parks. One day after the White House put out a three-phase blueprint for states to reopen their economies, President Donald Trump on Friday tweeted, "LIBERATE MINNESOTA," "LIBERATE MICHIGAN" and "LIBERATE VIRGINIA," three states whose Democratic governors have faced protests to ease restrictions. (AP)

A new NBC News/Wall Street Journal poll, conducted before Thursday's reopening guidelines, shows 58% of registered voters are more concerned about moving "too quickly in loosening restrictions." U.S. coronavirus cases have topped 750,000 and 40,600 deaths, according to Johns Hopkins University data Monday morning. Globally, infections have surpassed 2.4 million and 165,000 fatalities.

Trump announced Sunday he plans to use the Defense Production Act to force an unnamed manufacturer to increase production of swabs used in coronavirus testing by 20 million per month. The president made the announcement after some governors cited a lack of swabs and chemicals need for testing. Health experts, and even many CEOs, have warned against opening the country before widespread testing is available. (CNBC)

Democratic New York Gov. Andrew Cuomo on Sunday said the state plans to roll out tests this week to detect whether a person has developed Covid-19 antibodies, which indicates that they may be immune. New York's more than 248,000 cases and 18,200 deaths are the most in the nation. (CNBC)

Swiss drug giant Novartis has received emergency approval from the Food and Drug Administration to conduct a randomized trial of malaria drug hydroxychloroquine against Covid-19. Novartis plans to start recruiting 440 patients within weeks at more than dozen U.S. sites. The decades-old drug, also approved to treat lupus and rheumatoid arthritis, was authorized this month for use on coronavirus patients. (Reuters)

Walt Disney (DIS) is suspending pay for more than 100,000 employees, according to the Financial Times. The move would save the entertainment giant up to $500 million per month. Separately, UBS downgraded Disney to neutral from buy, saying the pandemic is hitting every Disney business, most especially the theme parks.

Facebook is making a big push into video gaming, which has seen a boom in demand due to the coronavirus lockdowns. The social media giant is launching today a mobile gaming app so people can create and watch live gameplay, as it tries to compete with Amazon's (AMZN) Twitch, Alphabet's (GOOGL) YouTube and Microsoft's (MSFT) Mixer. (CNBC)

Wynn Resorts (WYNN) CEO Matt Maddox is calling for a mid-to-late May reopening of the Las Vegas Strip, with extensive safety measures in place. Maddox's call came in a Nevada Independent opinion column. "Begin with reduced occupancy, physical distancing measures in place, temperature checks and no large gatherings," Maddox wrote. "We all need to wear a mask." (Reuters)

Walmart (WMT) sales jumped nearly 20% in March, according to documents reviewed by The Wall Street Journal, as consumers stockpiled household essentials amid the virus outbreak. The retail giant is also now requiring its workers to wear masks.

Gym chain 24 Hour Fitness is working with advisors at investment bank Lazard and law firm Weil, Gotshal & Manges to weigh options including a bankruptcy that could come as soon as the next few months, people familiar with the matter tell CNBC.

STOCKS TO WATCH

Alibaba (BABA) said on Monday it would invest $28.26 billion in its cloud computing division over the next three years, highlighting how critical an area this is to the e-commerce giant's future growth. "The Covid-19 pandemic has posed additional stress on the overall economy across sectors, but it also steers us to put more focus on the digital economy," Jeff Zhang, president of Alibaba Cloud Intelligence, said in a statement.

Halliburton (HAL) reported quarterly profit of 31 cents per share, 7 cents a share above estimates. Revenue also beat forecasts. The oilfield services company warned North American activity will sharply decline during the current quarter, due to oversupply and a massive drop in oil demand.

M&T Bank (MTB) earned $1.95 per share for its latest quarter, well below estimates. M&T increased its provision for credit losses to $250 million from $22 million a year ago, and $54 million at the end of the prior quarter. The company said the impact of Covid-19 on its operations could be material.

DuPont (DD) said it expected first-quarter profit of 82 cents to 84 cents per share, compared to a consensus estimate of 68 cents a share. The chemical giant is suspending full-year guidance due to uncertainty about the impact of the coronavirus outbreak and said it has suspended operations at several manufacturing facilities that serve the auto industry.

Philips (PHG) pulled its 2020 outlook as the coronavirus outbreak takes an increasing toll on the Dutch health technology company's bottom line. Demand for the company's ventilators has increased worldwide, but Philips is also seeing a significant decline in demand for its personal health products.

Norwegian Cruise Line (NCLH) has hired Goldman Sachs to explore various financing alternatives including a possible stake sale, according to The Wall Street Journal. Norwegian is attempting to navigate the financial difficulties caused by the virus-induced industrywide shutdown.

Macy's (M) is exploring a rescue financing package to boost its liquidity, according to a Bloomberg report. The retailer would reportedly sell bonds back by assets including some of its real estate.

WATERCOOLER

Venture capitalist Marc Andreessen wrote an essay over the weekend decrying the West's horrific lack of preparation and disorganized response to the coronavirus pandemic. He notes that the U.S. couldn't even ramp up production of masks to protect our healthcare workers, and contrasts this unfavorably with an America of past eras that built skyscrapers and interstates and microchips.