Dow falls 500 factors on the final day of September, S&P 500 suffers worst month since March 2020

US stocks fell on Thursday as Wall Street ended its worst month of the year on a sour note.

The Dow Jones Industrial Average lost 547 points, or 1.6%, after rising to the opening bell. The broader S&P 500 was down more than 1%, while the tech-heavy Nasdaq Composite was down 0.4%.

The market weakness came on the last day of a tough month for equities as rising interest rates, fears of inflation and concerns about China’s real estate market churned stocks. The S&P 500 ended September down more than 4% for the worst month since March 2020 when the pandemic caused a major market sell-off. The Dow and Nasdaq had their worst months in 2021.

“September lived up to its reputation and weighed on stock portfolio returns, but not too badly,” wrote Ed Yardeni of Yardeni Research. “There have been many concerns that higher wages, higher energy prices, and higher transportation costs will weigh on profits for the remainder of this year and through 2022. This is certainly something that we will pursue. But so far the analysts remain relative. “Sanguine.”

Concerns about inflation and supply chain problems continued to weigh on markets on Thursday. Bed Bath & Beyond shares fell more than 20% in early trading after the company said these issues hurt the company’s second quarter results and the news weighed on other retail stocks as well. Walgreens Boots Alliance and Home Depot fell more than 2%, making them two of the worst performers on the Dow.

Energy and financial stocks, which have been among the top performers in the past few weeks, took a step back on Thursday. Goldman Sachs and JPMorgan stocks were down more than 1%.

Tech stocks outperformed Thursday, but the Nasdaq still suffered its fifth straight loss. Technology stocks were hit by the recent surge in 10-year government bond yields, which broke above 1.567% earlier in the week. The measure withdrew slightly on Thursday.

Rising yields, fueled by concerns about inflation and signals from the Federal Reserve that it will soon begin to end its pandemic-era bond purchases, are viewed as negative for technology stocks as they make distant future earnings less attractive to investors.

“We talked about the scary season – September and October – and the expectation of a drop of about 5% from the high we had on an intraday basis. But we said we don’t expect a correction. “said David Bianco, DWS Group’s Chief Investment Officer.

“We expect yields to go up, and that’s why we’re overweight in banks, but we don’t expect yields to go up. And we can live with that without going up.” [valuations]“Added Bianco.

Apple and Amazon stocks ended the day in negative territory after rising in morning trading. Chip giant Nvidia and Netflix were able to hold their profits, but closed far from session highs.

“We wouldn’t get involved in any end-of-quarter machinations today and continue to advise fading rallies (especially in technology) as the coming weeks will be rocky,” wrote Adam Crisafulli of Vital Knowledge.

The losses in September resulted in a mediocre third quarter for the market. Over the 3 month period, the Dow was down 1.9% while the Nasdaq Composite was down 0.3%. The S&P 500 held onto a modest profit and is still up 15% year over year.

October is known for some heavy sell-offs, but overall it is typically the start of better seasonal performance for stocks. The S&P 500 posted an average gain of 0.8% for the month, according to the Stock Trader’s Almanac.

Investors also kept an eye on Washington as the Senate stood ready to pass a bill that the government would enjoy by early December. The deal would still have to pass the house.

Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen testified Thursday morning to the House of Representatives Financial Services Committee. Yellen reiterated her call to Congress to raise the debt ceiling, saying it was “catastrophic” not to do so.

On the data front, initial jobless claims for the previous week were 362,000. According to the Dow Jones, economists were expecting 335,000 copies to be printed.

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