Stock Market Sees Worst Month Since Oct 2020

by John McPhaul, The Chicago Times

September 30, 2021

NEW YORK — Despite last-minute moves by Congress to avert a partial government shutdown, U.S. stocks closed lower Thursday, as Wall Street wrapped up the final trading day of a difficult September and third quarter.

The Dow fell 4.3 percent for the month, while the S&P 500 fell 4.8 percent, snapping a seven-month winning streak.  The Nasdaq Composite fell 5.3 percent in September, its worst month in a decade.  The Dow was down 1.9 percent for the quarter, the S&P 500 was up 0.2 percent, and the Nasdaq Composite was up 0.4 percent.

With only hours before a partial government shutdown, Congress passed a short-term spending bill to keep the federal government running through early December. 

The House is still aiming to pass a roughly $1 trillion infrastructure bill passed by the Senate, but that may be in jeopardy as Democratic factions threaten to block the bill unless moderate members sign on to supporting a separate, debt laden bill focused on climate change, education, and healthcare that some say will break the economy and end high inflation.

Investors were also digesting new comments from Fed Chairman Jerome Powell, who testified to a House panel on COVID relief alongside Treasury Secretary Janet Yellen, about inflation remaining high for the time being due to supply bottlenecks as the economy recovers from the pandemic.

The number of people applying for unemployment benefits in the United States reached a two-month high in late September, but the majority of the increase occurred in California, a state plagued with economic set backs and government regulation.  The number of new jobless claims paid traditionally by states increased by 11,000 to 362,000 in the seven days ending September 25.

According to Dow Jones data, the S&P 500 Energy sector was the only one to finish the month up, the first time since June 2008.