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S&P 500 Snaps 7-Month Win Streak as Bulls Abandon Dip Buying

Stock MarketsSep 30, 2021 04:09PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 slumped Thursday to snap a seven-month win streak as progress by lawmakers to avoid a government shutdown failed to stoke investor appetite to buy the dip. 

The S&P 500 fell 1.2%, the Dow Jones Industrial Average fell 1.6%, or 547 points, the Nasdaq was down 0.44%.

The House backed a short-term appropriations bill, passed earlier in the Senate, to keep the government running through Dec. 3. President Joe Biden is expected to sign the bill  and avoid a government shutdown.

But the drama on Capitol Hill will renew as lawmakers remain at a stalemate over plans to raise the debt ceiling, to avoid the U.S. government defaulting on its obligations by Oct. 18. The prospect of another wave of fiscal spending took a hit, meanwhile, as Sen. Joe Manchin, whose vote is needed for the Democrats to pass their multi-trillion spending package without Republican support, is believed to support a $1.5 trillion reconciliation package, about $2 trillion short of proposed $3.5 trillion package.   

As well as uncertainty over developments in Washington, economic data showing a third-weekly rise in jobless claims stoked fears about a slowing recovery in the job market and weighed on sentiment.

In the week ended Sept. 25, jobless claims rose by 11,000 to 362,000, missing economists' expectations for a fall to 330,000.

Cyclical stocks - those that moved in tandem with the economy - were the worst performing as financial, industrials and energy traded in the red. 

Energy, which is set to end the month positive, was also dragged lower by falling oil prices following data on Wednesday showing an increase in US crude oil stocks as production normalized. 

"US crude oil production grew by another 500,000 barrels per day week-on-week to reach 11.1 million barrels per day, which can be seen as a normalization following the hurricane-related outages," Commerzbank (DE:CBKG) said. 

Against the backdrop of ongoing political drama, investor sentiment continues to be challenged and weighed on the broader market as tech gave up some on its intraday gains.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) the so-called  Fab 5, which make up for about 25% of the S&P 500, were lower.

The struggles in tech come even as the appreciation in Treasury yields took a breather, though the 10-year yield continued to trend above 1.5%.

On the earnings front, Bed, Bath, & Beyond, Inc. (BBBY) fell 22% after reporting second-quarter earnings of $0.04 that fell well short of Wall Street expectations.

CarMax (NYSE:KMX), meanwhile, also reported quarterly results that fell short on the bottom line, sending its shares 11% lower.

S&P 500 Snaps 7-Month Win Streak as Bulls Abandon Dip Buying
 

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Comments (11)
Meru Pet
Meru Pet Oct 01, 2021 12:20AM ET
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i bet that today, the articles are gonna be bullish 🙄
Forex Harbingers
Forex Harbingers Sep 30, 2021 9:05PM ET
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Watch this bull come up and ***those who believe this. Its end of year and institutions have been accumulating. Think they are looking to take losses by years end? Not a chance
Jeff Chevalier
Jeff Chevalier Sep 30, 2021 9:05PM ET
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Forex, the last 6 months has been stupid retail investors buying insanely over priced assets. Institutions have made massive profits and are selling. I think it's the BTFD people who are going to eat this one.
Meru Pet
Meru Pet Sep 30, 2021 8:06PM ET
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the futures for Friday are still green ...
Patrick Joly
Patrick Joly Sep 30, 2021 8:06PM ET
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lol. There is always somehow some light somewhere. I like your point! :)
Patrick Joly
Patrick Joly Sep 30, 2021 8:06PM ET
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unfortunatly...it is already the past...
Joel Schwartz
Joel Schwartz Sep 30, 2021 7:23PM ET
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Republicans are veto’ing the funding for bills they already passed under Trump. Absolutely shameless.
Davis Davis
Davis Davis Sep 30, 2021 7:15PM ET
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Biden 's economy.For those who voted for Biden.Feel the pain?
James Gomez
James Gomez Sep 30, 2021 6:33PM ET
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Supply the data showing lack of dip buying
Arsene Lar
Arsene Lar Sep 30, 2021 6:12PM ET
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Lots of reference everywhere about dip buying activities, quite popular these days yet I have yet to see big brokerage firm detailed retail report about it or lack of their off.
Meru Pet
Meru Pet Sep 30, 2021 5:58PM ET
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abandon dip buying: not for everything. Look: Tesla dropped like 0.25% and still some people bought... 🙄 (irony)
VeryBad Trader
VeryBadTrader Sep 30, 2021 5:15PM ET
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Crude prices did not drop today.. closed green… please double check articles when publishing / updating them.
Ronald Warren
Ronald Warren Sep 30, 2021 4:48PM ET
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Very soon. Maybe not this week, but soon. It will not be a dip.
Yevgen Arkhypov
Yevgen Arkhypov Sep 30, 2021 4:48PM ET
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yes, exactly right after default
Ïtz Tmïléyïñ
Ïtz Tmïléyïñ Sep 30, 2021 4:27PM ET
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Nice
 
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