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Wall St slides, S&P 500 posts worst month, quarter since COVID outbreak

EconomySep 30, 2021 07:03PM ET
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© Reuters. FILE PHOTO: A Wall St. street sign is seen near the New York Stock Exchange (NYSE) in New York City, U.S., September 17, 2019. REUTERS/Brendan McDermid/File Photo

By Stephen Culp

NEW YORK (Reuters) - Wall Street ended sharply lower on Thursday and the S&P 500 posted its worst month since the onset of the global health crisis, following a tumultuous month and quarter wracked by concerns over COVID-19, inflation fears and budget wrangling in Washington.

The U.S. Senate and House approved a stopgap spending bill to keep the government running late in the session, but after a brief market uptick, stocks resumed their decline, dragging even the Nasdaq into the red after trending higher most of the day.

"The market’s been resilient, but the risk tied up in the policy headlines over the debt ceiling, the chaos around these spending bills is weighing on the markets a bit as the quarter comes to a head," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.

"In a larger context it’s been pretty mild. We’re coming on the heels of seven ‘up’ months and volatility’s been fairly muted despite the headline risks, not to mention COVID-19 and tapering," Mayfield added. "The market had to take a pause, and a pause is necessary and probably to be expected."

All three major U.S. stock indexes had their worst quarterly performance since the opening months of 2020, when the COVID-19 pandemic brought the global economy to its knees.

The S&P notched a modest gain over the July-to-September period, while the Nasdaq and Dow suffered quarterly losses.

For the month, the S&P and the Nasdaq suffered their biggest percentage drops since March 2020, while the Dow saw its largest monthly percentage drop since October.

The tug-of-war between growth and value persisted throughout the month and quarter. The S&P growth index plunged 5.8% in September, but notched a quarterly gain of 1.7%. Value shed 3.5% in September and 1.4% over the July-to-September period.

"It's no surprise as we’ve seen yields tick higher you’ve seen the outperformance of value," Mayfield said. "We expect yields to tick higher to the end of the year and cyclical and value performance to accompany that."

On the economic front, initial jobless claims unexpectedly edged higher for the third straight week. Market participants now look to consumer spending, inflation and factory activity data expected on Friday for signs of economic health and clues regarding the U.S. Federal Reserve's shifting timeline for tapering its asset purchases and hiking key interest rates.

Fed Chairman Jerome Powell, along with Treasury Secretary Janet Yellen, testified before the U.S. House Committee on Financial Services, even as wrangling continued on Capitol Hill over funding the government in the face of a looming deadline and the threat of potential shutdowns and credit default.

The Dow Jones Industrial Average fell 546.8 points, or 1.59%, to 33,843.92, the S&P 500 lost 51.92 points, or 1.19%, to 4,307.54 and the Nasdaq Composite dropped 63.86 points, or 0.44%, to 14,448.58.

All 11 major sectors of the S&P 500 ended the session in the red, with industrials and consumer staples showing the largest percentage drops.

Declining issues outnumbered advancing ones on the NYSE by a 1.74-to-1 ratio; on Nasdaq, a 1.14-to-1 ratio favored decliners.

The S&P 500 posted four new 52-week highs and four new lows; the Nasdaq Composite recorded 39 new highs and 150 new lows.

Volume on U.S. exchanges was 12.88 billion shares, compared with the 10.61 billion average over the last 20 trading days.

Wall St slides, S&P 500 posts worst month, quarter since COVID outbreak
 

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Comments (16)
Bipin Kochar
Bipin Kochar Oct 01, 2021 5:01AM ET
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The US issues like approval of government borrowing limits or the start of a taper are petty and least impactful to the markets -The biggest threat to the world economy is the Chinese energy crisis which has led to severe power cuts on aluminum and steel production. China produces over 50% of worlds steel and aluminum - and has imposed various measures to restrain exports of key industrial metals - starving the world of these key industrial materials.Once winter sets in, energy crisis will only worsen and result in further sharp reduction in production of these metals - pushing up prices at a time when the infrastructure bill will push up demand. The US should hence prepare for this crisis by working with Japan, Korea, Canada, Europe to ramp up output to ensure that the nascent economic revival is not choked.
Iyarin Boonnum
Iyarin Boonnum Sep 30, 2021 9:35PM ET
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Not The COVID-19 cases but US economic is going to collapse.
lalit mahajan
lalit mahajan Sep 30, 2021 4:43PM ET
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We need more freebies
Gervais Christopher
Gervais Christopher Sep 30, 2021 4:39PM ET
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In the US, we have lost faith in the Markets, the Fed, and the government...hope you are prepared for the fallout.
Alberto Vianello
Alberto Vianello Sep 30, 2021 4:39PM ET
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Is this wallstreetbets?
Mitchel Pioneer
Mitchel Pioneer Sep 30, 2021 2:32PM ET
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You can set your watch by it...Here comes the flagrant "late trade" round of FRAUD, brought to you by the US Ponzi Scheme, biggest investment JOKE in the world.
Dave Jones
Dave Jones Sep 30, 2021 2:32PM ET
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It's happening! They are so corrupt!!
ben sc
ben sc Sep 30, 2021 2:05PM ET
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the real sell off is underway and due to the tax plan that is slowly leaking out. Unrealized gains are income now! so realize those gains, sell now. or you'll be taxed into oblivion.
akljsdf askldf
akljsdf askldf Sep 30, 2021 1:54PM ET
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We need more QE
ben sc
ben sc Sep 30, 2021 1:54PM ET
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hahaha more pain killers for the dying patient!
Rodney Dangerfield
Rodney Dangerfield Sep 30, 2021 1:39PM ET
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when this money grab is all done very few will be standing there with something and a whole lot of you will be standing there with nothing...
Ferdinando Riboni
Ferdinando Riboni Sep 30, 2021 1:13PM ET
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more fake news
Stan Smith
Stan Smith Sep 30, 2021 12:59PM ET
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Wall St rises despite steep monthly loses...sounds about right!. Thanks FED for the MMT market distortions and  financial magic tricks
Mitchel Pioneer
Mitchel Pioneer Sep 30, 2021 12:55PM ET
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The noon floor goes under the laughingstock of the financial world.  Uninhibited "rallies," floors under losses, and miraculous "late trade" reversals, hallmarks of the US Ponzi Scheme, greatest financial fraud in history.
Ronald Warren
Ronald Warren Sep 30, 2021 11:57AM ET
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We're experiencing a repeat of 2020. Selloffs progressively get larger until we're into the abyss!!
Khwarizmi Algebra
Khwarizmi Algebra Sep 30, 2021 11:52AM ET
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Fears from evergrande fallout, while chinese stock market itself is green nearly everyday. LOL
Mark Stallone
Mark Stallone Sep 30, 2021 11:50AM ET
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Dows down over 300. Update your article title.
Stefan Kunco
Stefan Kunco Sep 30, 2021 11:47AM ET
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I think you have chosen the liquidator of the economy in the USA. Since sitting in the chair, there has not been a single day with positive news. Everything is bad and the next day worse. I think he is slowly sucking everything out of you, including your pride and money.
Jan Buyle
Jan Buyle Sep 30, 2021 11:38AM ET
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Not rising, going down again... big correction on the way. Stay safe!
 
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