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Wall Street ends sharply lower in broad sell-off

Published 09/20/2021, 07:00 AM
Updated 09/20/2021, 07:46 PM
© Reuters. FILE PHOTO: People wearing face masks walk by the New York Stock Exchange (NYSE) during the outbreak of the coronavirus disease (COVID-19) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

By Caroline Valetkevitch

NEW YORK (Reuters) - Wall Street fell in a broad sell-off on Monday, with the S&P 500 and Nasdaq suffering their biggest daily percentage drops since May, as fear of contagion from potential collapse of China's Evergrande drove investors out of equities in a flight for safety.

The Nasdaq also hit its lowest level in about a month, but indexes pared losses just before the close to end well off their lows of the session. The Nasdaq was down more than 3% during the day.

Microsoft Corp (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) Inc, Inc (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB) and Tesla (NASDAQ:TSLA) Inc were among the biggest drags on the Nasdaq and the S&P 500.

All 11 major S&P 500 sectors were lower, with economically sensitive groups like energy, which fell 3%, down the most. Defensive sectors including utilities were down the least.

Investors also were nervous ahead of the Federal Reserve's policy meeting this week.

The banking sub-index dropped 2.9% while U.S. Treasury prices rose as worries about the possible default of Evergrande appeared to affect the broader market.

"You kind of knew that when there was something that caught markets off guard, that it was going to lead to probably a bigger sell-off and you didn't know what the reason would be," said Sameer Samana, senior global market strategist at Wells Fargo (NYSE:WFC) Investment Institute.

"I guess it's the China news but... it's not altogether surprising given how bullish people were."

Wednesday will bring the results of the Fed's policy meeting, where the central bank is expected to lay the groundwork for a tapering, although the consensus is for an actual announcement to be delayed until the November or December meetings.

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The Dow Jones Industrial Average fell 614.41 points, or 1.78%, to 33,970.47, the S&P 500 lost 75.26 points, or 1.70%, to 4,357.73 and the Nasdaq Composite dropped 330.07 points, or 2.19%, to 14,713.90.

The Dow registered its biggest daily percentage drop since July, while the CBOE volatility index, known as Wall Street's fear gauge, rose.

The S&P 500 is now down about 4% from its Sept. 2 record high close.

Strategists at Morgan Stanley (NYSE:MS) said they expected a 10% correction in the S&P 500 as the Fed starts to unwind its monetary support, adding that signs of stalling economic growth could deepen it to 20%.

Most airline carriers ended higher after the United States announced it will relax travel restrictions in November on passengers from China, India, Britain and many other European countries who have received COVID-19 vaccines.

Declining issues outnumbered advancing ones on the NYSE by a 5.40-to-1 ratio; on Nasdaq, a 4.66-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and three new lows; the Nasdaq Composite recorded 23 new highs and 193 new lows.

Volume on U.S. exchanges was 12.24 billion shares, compared with the 9.89 billion average for the full session over the last 20 trading days.

Latest comments

umm a meltdown would take the dow back to 16000 where it really belongs looking at 15-30 year charts lol. they have pumped and propped this to the moon.
Stop being salty that you never got to buy securities that youve been eyeing for years, you dont hop on the train now, youll never get on it, invest now or simply keep regretting it when dow hits 70,000 in a couple years
Unlimited QE continues. Nothing to worry. Free money!
Once again, a big thanks to all of you little fraidy cats, I'm buying everything you're selling, did the same thing last year, amazing how prosperous you can become off of other people's fear - oh, and I love the new beach house, thank you all!
If you have the time to wait it out. not a ton of good news out there.
yawn the fed can just buy more and these losses will be erased in the blink of an eye, these crooks.
Classic Profit taking yeah okay explain BABA down 55% this year and down 6.5% today. No profits to be found there.
Where is Trump? We need his tweets to push up the market...
Interesting how this new article omits the problems in China. Must be pretty bad over there.
Thanks Joe.🤬
New printers v2.0 announcing soon …
Let the magic show begin in the biggest investment JOKE in the world.
Yes 🥰
The market needed a correction anyway. I'm buying this dip while everyone else is complaining about this that and the other.
just fake game to collect money
They will just inflate their way to growth.
cmon rebound
Let the storm come stronger!!!
junkie stress encompassing lighter drug shots
There should be resistance at DJI $25,000-$23,000. (Never invest more than you can afford to completely lose.)
So the US government goes $30+ trillion into debt (over $200,000 per taxpayer) due to reckless spending and is at risk of default, and at the same time the demented potato and democrats are trying to waste another $3.5 trillion of pork spending on shovel ready an your children and your childrens children get to pick up the tab in the form of hyperinflation and hyper taxation... meanwhile if you are 1 day late on your credit card payment your credit score plummets and you start accruing 25% APR interest. There are no "growth worries" the only worry the market has is how much the Fed is going brrrrr, the economy has just been an illusion of revenue growth through inflation and is why it tanks any time the Fed even hints at raising interest rates.
Time to think.. how to get insulated in such unforseen turmoils, though it looks to be contagion and might have a ripple effect to other market as well..many asset class could melt at large .. fall on crypto is giving signal to that ..
taxes going up for middle class working man pay for the lazy and elite..... its gonna get harder to even buy groceries..thank you Democrats
Ferdinando Baloney has a prognostication. It takes more than loyalty to the fat golfer and corrupt GQP political party to be a soothsayer.
- yes, but the politicians approving them.
what groceries? walmart running shortages lately
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