Dow Slides 300 Points as Brutal September Comes to a Close

view original post

Stocks were mixed Thursday, on pace for their worst monthly performance of the year, as investors continue to navigate a series of risks linked to energy markets, China growth and U.S. fiscal policy.

The Dow Jones Industrial Average fell 311 points to 34,079 while the S&P 500, which is down 3.6% for September, was off 0.34%.

The Nasdaq, facing its biggest monthly slump since September of last year, was up 0.42%.

The Senate was voting on a stopgap funding bill to avert a government shutdown and keep the government funded through early December, CNN reported early Thursday afternoon.

In the retail sector, Kohl’s  (KSS) – Get Kohl’s Corporation (KSS) Report tumbled after Bank of America issued a rare double downgrade, while Bed, Bath & Beyond  (BBBY) – Get Bed Bath & Beyond Inc. Report sank after slashing its full-year profit forecast due to “unprecedented supply chain challenges.”

China saw a surprise slowdown in manufacturing activity this month, linked to rolling power cuts across the industrial northeast. The report underscored the myriad challenges facing the world’s second largest economy heading into the final months of the year.

“Worries about China, the pandemic, the debt ceiling and tax legislation are weighing on investors right now,” said Tom Mantione, managing director at UBS Private Wealth Management. 

TheStreet Recommends

“[But] it is important to understand which issues may create structural change and which ones create short-term volatility that investors can take advantage of,” 

Jobless claims rose to 362,000 for the week ending Sept. 25, the Bureau of Labor Statistics said, although continued claims — calculated a week in arrears — edged lower, to 2.802 million. 

The government’s final estimate for second-quarter GDP growth nudged higher, to 6.7%, thanks in part to solid consumer spending. 

“Though jobless claims ticked up yet again, weekly labor market data can be tricky to digest just because there is a lot of it and it’s certainly bounced around a lot throughout the pandemic,” said Mike Loewengart, managing director of investment strategy at E-Trade Financial. 

Loewengart said that the end of federal pandemic unemployment benefits earlier in the month also likely drove an increase in filings for state benefits.

“So the market may take this one piece of the data in stride as we wait for the reads next week, especially since the big-ticket item right now is the debt ceiling,” he said.

Loewengart also noted that the final GDP read was stronger than anticipated, “so while slower growth is a concern, it’s encouraging to see a bit of a bump on that front.” 

“Bottom line, as we wrap up the third quarter and look ahead, investors will likely need to remain nimble as the economic recovery continues in a zig zag,” he said.