The S&P 500 and Dow fell on Thursday as concerns over economic growth and a possible government shutdown propelled Wall Street into a sharp monthly decline, while losses in the Nasdaq were offset by major technology stocks.
A batch of mixed economic data prompted major volatility in the markets, as investors revised slightly upward in second-quarter economic growth against a higher-than-expected rise in weekly jobless claims.
Losses in major financial stocks saw the Dow Jones largely lag behind its peers, as a rise in jobless claims cast some doubt on the Federal Reserve’s plans to tighten policy sooner.
All major indexes were set for sharp monthly declines with the S&P 500 index ending a seven-month winning streak, fueled by concerns about higher pricing pressures, from a possible default of China Evergrande. The fall and the wrangling over the US debt limit.
At a hearing before the US House Financial Services Committee on Thursday, Fed Chair Jerome Powell said the central bank finds itself in a difficult position with regard to the tension between inflation and employment.
“You spoke to Powell with more concern on inflation. So it looks like he’s going to have to start shorting eventually,” said Dennis Dick, a trader at Bright Trading LLC.
“It’s just a business environment where people are locking in short-term day-trading profits … because a lot of money managers worry that the next big move could actually be the bottom.”
All 11 major S&P sectors fell, with half of them down more than 1%.
Technology stocks fell the least among their peers, as investors favored relatively stable sectors. A fall in Treasury yields from three-month highs also helped limit losses in the region.
Rate-sensitive FAANG shares lost a combined $415 billion in value this month, except for Netflix Inc., as the Fed’s scathing shift on monetary policy sparked a rally in Treasury yields and prompted investors to move into those areas. Inspired for those who stand to benefit the most from an economic revival.
The streaming video pioneer is set to add about 7% in September.
Energy stocks were still headed for their best monthly performance since February, while the financial sector was on track for its sixth straight quarterly profit.
Meanwhile, Democratic divisions were influencing President Joe Biden’s agenda to invest in infrastructure, expand social services and address climate change as the US Congress scheduled votes on Thursday to halt a government shutdown .
At 12:21 p.m. ET, the Dow Jones Industrial Average was down 428.29 points, or 1.25%, at 33,962.43, the S&P 500 was down 37.31 points, or 0.86%, at 4,322.15, and the Nasdaq Composite was down 44.10 points, or 0.30. %, at 14,468.34.
For the third quarter, the S&P 500 was on track for its sixth straight quarterly profit, outperforming the other two major indexes.
Issues that declined to a 2.08-to-1 ratio on the NYSE and a 1.12-to-1 ratio on the Nasdaq outweighed the advances.
The S&P index recorded four new 52-week highs and two new lows, while the Nasdaq recorded 32 new highs and 125 new lows.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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