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S&P 500 posted 2020 gains as COVID-19, oil price crash obliterated energy sector

In defiance of the pandemic's dampening effect on the global economy, most of the S&P 500's indexes rose in 2020, according to an analysis of S&P Global Market Intelligence data. The benchmark's Energy Sector index, however, was gutted in the wake of the year's oil price crash, the analysis found.

The S&P 500 itself gained 16.3% because of outperformers such as the Consumer Discretionary index, which was up 32.1%, and the Information Technology index, which rose 42.2%. Tesla Inc. was the benchmark's best-performing stock in 2020, spiking 672.1% in a year that ended with the electric-vehicle maker's S&P 500 debut and strong deliveries.

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E-commerce giant PayPal Holdings Inc. and computer graphics heavyweight NVIDIA Corp. also saw some of the biggest gains, increasing 121.4% and 121.2%, respectively, during 2020, as did pharmaceuticals company Catalent Inc., which is helping produce Moderna Inc.'s coronavirus vaccine.

Carnival Corp. & PLC and Norwegian Cruise Line Holdings Ltd., meanwhile, were the S&P 500's worst performers with 58.8% and 58.1% declines, respectively, as the cruise operators faced billion-dollar revenue losses. Even though the S&P 500's Industrials Sector index gained 9% in 2020, carriers United Airlines Holdings Inc. and American Airlines Group Inc. were also two of the year's biggest losers.

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The hardest-hit S&P 500 sector of all, however, was energy, which dropped 37.3%.

Independent oil and gas producer Occidental Petroleum Corp. topped the list of ravaged energy stocks, plummeting 56.6% during a year dominated by demand disruption and oversupply that even saw crude prices go negative.

S&P Global Ratings downgraded Occidental's issuer credit rating to junk after a three-year alliance between OPEC and other producer nations led by Russia suddenly unraveled and coronavirus concerns emerged. At that time, producer Occidental was fighting against what one analyst called a "bankruptcy whirlpool" by August 2020.

Oilfield services providers such as TechnipFMC PLC and refiners including HollyFrontier Corp. were also among the S&P 500's worst performers. Technip's stock price fell 55.8% and HollyFrontier shares slid 49.8% as the whole oil supply chain faced fallout from the downturn. Pipelines suffered as well, with Oneok Inc. shedding 48.7%. The midstream operator also faced threats to its revenue growth from a legal battle over the Dakota Access LLC pipeline.

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Going against the sector grain were many shale gas stocks, which outperformed major indexes and their oil and gas peers in 2020 because of growing investor confidence that natural gas prices would rise in 2021 and drillers would spend less. Some of the shale gas segment's top performers were not among the S&P 500 companies: Antero Resources Corp. units increased 100% during the year, while Range Resources Corp. recorded a 46% share price jump.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.