US stocks fall on oil price plunge

US stocks fell on the opening for the second day in a row Tuesday as the rout in oil prices underscored investor doubts about the strength of the economy ravaged by government-ordered shutdowns.

West Texas Intermediate crude oil futures, the gauge for US prices, reversed early gains Tuesday and turned negative. On Monday, the price fell below zero for the first time in history.

The price of oil is considered a proxy for future economic activity. The steep slide in worldwide prices suggests investors see more turbulence ahead that's likely to be reflected in lower corporate earnings, eroding stock value.

The May contract for West Texas Intermediate recently changed hands at minus $4 a barrel. In effect, producers will pay buyers to take the oil off their hands.

Contracts for June delivery skidded about 20 percent to $16.24 a barrel after falling below $15. Oil for July delivery fell about 11 percent to $23.42.

Brent crude, the international benchmark, fell about 15.5 percent in early trading to $21.60 a barrel. Earlier, the price fell to $18.10, the lowest since December 2001.

The sharp decline of oil prices underscores the effect government-imposed shutdowns intended to slow the spread of the coronavirus have had on the economy.

Air travel and international trade have withered and despite plans by major US oil companies such as Chevron and ConocoPhillips to reduce production, cuts have not come fast enough.

Planned cuts by OPEC and G-20 nations won't kick in until May. The result: producers are running out of space to store crude oil and even reduced supply outstrips weak demand, sending prices lower.

In early trading, the Dow Jones Industrial Average lost 366.44 points, or 1.59 percent, to 23,284.00. The S&P 500 dipped 1.44 percent. The Nasdaq Composite skidded 1.45 percent.

A major consumer products company also took a hit from the coronavirus pandemic, also called COVID-19.

Coca-Cola said the closure of restaurants, movie theaters and cancellation of sports events to limit the spread of the coronavirus reduced first quarter sales 1 percent overall from a year earlier to $8.6 billion.

The company, which markets soft drinks, bottled water, fruit juices and electrolyte-enhanced sports drinks, said sales increased in the first two months of the year before much of the economy was shut down.

Sales of carbonated beverages fell 2 percent in the first quarter led by declines in Asia, especially China, the company said.

Nevertheless, the Atlanta-based company reported earnings of $2.76 billion, or 64, cents a share, compared with $1.68 billion, or 39 cents a share, in the same quarter last year. But it warned that "organic" revenue excluding currency fluctuations, acquisitions and divestitures was flat.

Through the end of February sales grew 3 percent, excluding China, and the company said it was on target to meet 2020 sales targets.