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Wall Street closes rollercoaster week sharply lower

Published 09/17/2021, 06:52 AM
Updated 09/17/2021, 06:25 PM
© Reuters. FILE PHOTO: A street sign for Wall Street is seen outside of the New York Stock Exchange (NYSE) in New York City, New York, U.S., June 28, 2021. REUTERS/Andrew Kelly/File Photo

© Reuters. FILE PHOTO: A street sign for Wall Street is seen outside of the New York Stock Exchange (NYSE) in New York City, New York, U.S., June 28, 2021. REUTERS/Andrew Kelly/File Photo

By Stephen Culp

NEW YORK (Reuters) - U.S. stocks ended sharply lower in a broad sell-off on Friday, ending a week buffeted by strong economic data, corporate tax hike worries, the Delta COVID variant, and possible shifts in the U.S. Federal Reserve's timeline for tapering asset purchases.

All three major U.S. stock indexes lost ground, with the Nasdaq Composite Index's weighed down as rising U.S. Treasury yields pressured market-leading growth stocks.

They also posted weekly losses, with the S&P index suffering its biggest two-week drop since February.

"The market is struggling with prospects for tighter fiscal policy due to tax increases, and tighter monetary policy due to Fed tapering," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

"Equity markets are also a little softer due to today's weak Consumer Sentiment data," Carter added. "It's triggering concerns that the Delta variant could slow economic growth."

A potential hike in corporate taxes could eat into earnings also weigh on markets, with leading Democrats seeking to raise the top tax rate on corporations to 26.5% from the current 21%.

While consumer sentiment steadied this month it remains depressed, according to a University of Michigan report, as Americans postpone purchases while inflation remains high.

Inflation is likely to be a major issue next week, when the Federal Open Markets Committee holds its two-day monetary policy meeting. Market participants will be watching closely for changes in nuance which could signal a shift in the Fed's tapering timeline.

"It has been a week of mixed economic data and we are focused clearly on what will come out of the Fed meeting next week," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Helena, Montana.

The Dow Jones Industrial Average fell 166.44 points, or 0.48%, to 34,584.88; the S&P 500 lost 40.76 points, or 0.91%, at 4,432.99; and the Nasdaq Composite dropped 137.96 points, or 0.91%, to 15,043.97.

The S&P 500 ended below its 50-day moving average, which in recent history has proven a rather sturdy support level.

(For graphic on S&P 500 flirts with 50-day moving average - https://fingfx.thomsonreuters.com/gfx/mkt/mopankqmbva/Pasted%20image%201631892826338.png)

Of the 11 major sectors in the S&P 500, all but healthcare ended in the red, with materials and utilities suffering the biggest percentage drops.

COVID vaccine manufacturers Pfizer Inc (NYSE:PFE) and Moderna (NASDAQ:MRNA) Inc dropped 1.3% and 2.4%, respectively, as U.S. health officials moved the debate over booster doses to a panel of independent experts.

U.S. Steel Corp shed 8.0% after it unveiled a $3 billion mini-mill investment plan.

Robinhood Markets Inc (NASDAQ:HOOD) rose 1.0% after Cathie Wood's ARK Invest bought $14.7 million worth of shares in the trading platform.

Volume and volatility spiked toward the end of the session due to "triple witching," which is the quarterly, simultaneous expiration of stock options, stock index futures, and stock index options contracts.

Volume on U.S. exchanges was 15.51 billion shares, compared with the 9.70 billion average over the last 20 trading days.

© Reuters. FILE PHOTO: A street sign for Wall Street is seen outside of the New York Stock Exchange (NYSE) in New York City, New York, U.S., June 28, 2021. REUTERS/Andrew Kelly/File Photo

Declining issues outnumbered advancing ones on the NYSE by a 1.97-to-1 ratio; on Nasdaq, a 1.00-to-1 ratio favored advancers.

The S&P 500 posted seven new 52-week highs and two new lows; the Nasdaq Composite recorded 67 new highs and 82 new lows.

Latest comments

Get ready for Taper. Fed will announce at meeting now that the spotlight is on thier double dipping. Powell owning 2.5 million dollars worth of the exact same bonds the FED is buying. Can't make this stuff up...
Fake fall to shake off poor bears
Bidens pushing booster shots, whenIsraeli scientists just proved conclusively that natural immunity is 13x more effective than vaccines. Israeli leaders listen to honest science. Liberals smear honest science.
4 million people that tried the natural immunity route, died. Get your head out of the sand and pay attention.
lol hilarious and much more decisive than what I was going to say
Next weeks news. Nasdaq gains as investors rotate into tech growth stocks.
What a joke. NASDAQ will go down further. The 3rd pandemic wave is about to and so it's definitely isn't best time for the tech growth stocks.
Title correction: "Biden approval sees massive drop in approval during first half year in office, and Kamala has lowest approval of any VP in recent history, even in push polling despite 24/7 North Korea-style propaganda in their favor by MSM"....meanwhile high inflation, high tax, reckless spending, and handed over Afghanistan to the Taliban after 20 years and trillions of taxpayer dollars.
And let's not forget that COVID cases are rising faster now AFTER 350+ million americans (and 5 billion people globally) have been vaccinated than before...this time with vaccine -resistant variants being selective spread by vaccinated people.
lol... you need help... psycho help.. lol
Sell bigtech and covid farma, buy oil, natural gas and smallcap. Got it.
If they raise taxes that would round things out nicely, dont want to leave anything out.
Like to check the companies from the investment managers advise in tbe articles. Don't have a clue or at least the company doesn't seem very profitable. Please research on this.
Tax back in news after two days
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