NEW YORK (AP) — The Latest on the financial markets (all times local):
Oil prices are surging a day after they plunged 25% amid a price war between producers Saudi Arabia and Russia, which are pulling more oil out of the ground even though demand is falling due to the coronavirus.
Benchmark U.S. crude climbed $3.23, or 10.4%, to settle at $34.36 a barrel Tuesday. Brent crude, the international standard, rose $2.86, or 8.3%, to settle at $37.22 a barrel.
The pickup in oil drove energy company shares broadly higher. Marathon Oil led the sector, vaulting 16.5% in afternoon trading a day after dropping nearly 47%.
Occidental Petroleum gained 11.6% after the company slashed its quarterly dividend to 11 cents per share from 79 cents and said it will cut capital spending by about 30% this year. The company’s shares dropped nearly 70% in the previous two trading sessions.
The S&P 500 is up about 3.4% so far Tuesday, but even with the gain the benchmark index remains just one big drop away from bear market territory.
After a three-week rout that included its biggest one-day drop since 2008, the S&P 500 is down about 16% from the high of 3,386.15 it reached on Feb. 19. If that decline stretches to 20% and stays at or below that level for an extended period, stocks will be in a bear market and the bull market that began back in 2009 will have ended.
The biggest factor behind the recent sharp drop in stocks has been fears that the coronavirus outbreak could severely crimp the global economy. A plunge in oil prices Monday added to investors’ anxiety.