Some of this recent rally has gotten ahead of itself: Investment strategist

Some of this recent rally has gotten ahead of itself: Investment strategist

CNBC's Kelly Evans discusses markets with Mark Luschini of Janney Montgomery Scott and Bill Smead of Smead Capital Management.

Stocks fell sharply to start the week on Monday after a historic decline in U.S. crude prices. The market was coming off its first back-to-back weekly gains in more than two months.

The Dow Jones Industrial Average traded 552 points lower, or 2.3%. The S&P 500 slid 1.8%. (Click here for the latest market news.) Boeing fell more than 7% to lead the Dow lower while Chevron and Exxon Mobil dropped more than 4% each. Energy and utilities were the worst-performing sectors in the S&P 500, falling more than 3% each.

The Nasdaq Composite was down 0.5% as gains from stay-at-home plays offset other losses. Amazon and Netflix rose 2.2% and 4.8%, respectively, while Roku climbed more than 6%.

A historic fall in energy prices raised concerns about how deep the economic slowdown will be this quarter. The May contract for West Texas Intermediate, which expires on Tuesday, plunged more than 300% to -$40.08 per barrel on weak demand outlook and storage capacity issues.

The negative impact on stocks from oil likely would have been worse were it not for lesser declines in oil contracts expiring during future months. WTI’s June contract slid over 18.4% to $20.37 per barrel. July’s oil contract was down 12%. It was a strange phenomenon that analysts chalked up to the collapse in demand for oil contracts expiring this week. Refineries don’t need the oil and are near storage capacity with most of the country shut down.

“The moves in the oil market are really just unbelievable now that we are literally running out of storage space,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note. “I do believe that these types of moves is what bottoms are made of and in May and June when things start to reopen again it will go a long way in helping along with the production cuts.”

Stocks got a jolt last week after a report said patients with severe virus symptoms were quickly recovering after using remdesivir, a Gilead Sciences drug. The Dow, S&P 500 and Nasdaq all rose more than 2% last week. The major averages also had their first consecutive weekly gain since February.

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