Dow drops 400 points, heads for a big September loss

On Sep 30, 2021

Damian J. Troise

Stocks moved lower on Wall Street Thursday as the major indexes headed for steep monthly losses.

The Dow Jones Industrial Average slid 400 points, or 0.8%. The S&P 500 fell 0.8% and the Nasdaq dipped 0.3%. For the month, the Dow was down nearly 3% while the S&P 500 and the Nasdaq were off 3.6% and 4.9%, respectively.

A mix of companies that provide consumer goods and services weighed down the broader market. Roughly 80% of stocks in the benchmark S&P 500 fell. Some of those losses were tempered by gains from technology companies.

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Investors have had their eyes on Washington, where Democrats and Republicans in Congress have been wrestling over extending the nation’s debt limit. Congress has moved to avert a crisis, and the Senate is poised to approve legislation to fund the federal government into early December.

The broader market has stumbled through September as investors try to get a clearer picture of the economy’s path amid inflation concerns and uncertainty about how COVID-19 will continue to impact industries and consumers.

The benchmark S&P 500 is down 4% in September and is headed for its worst monthly loss since March 2020. The index is also on pace for a 0.9% gain this quarter, which would be its smallest quarterly gain since the pandemic stunned the economy and financial markets.

Investors have been weighing a mixed bag of economic data that revealed that the highly contagious delta variant crimped consumer spending and the job market’s recovery.

The mixed signals continued Thursday as the Labor Department reported that unemployment applications rose for the third straight week and were higher than economists anticipated. The Commerce Department upgraded its estimate of economic growth during the second quarter to 6.7%, which was slightly better than economists expected.

Inflation concerns that had been weighing on the market earlier in the year returned in September as a wide range of companies issued more warnings about the impact of rising prices on their finances.

Bond yields were stable. The yield on the 10-year Treasury note, a benchmark for many kinds of loans, remained at 1.54% from late Wednesday. It was as low as 1.32% just over a week ago.