Reuters File Photo: September 17, 2019, The Wall St. Street sign is seen near the New York Stock Exchange (NYSE) in New York City, USA. Router / Brendon McDermide / File photo
Written by Stephen Kulp
NEW YORK (Reuters) – Wall Street shook on Thursday as investors watched the last day of the quarter as the Delta Covid variant and inflation worries, seeing ongoing efforts in Washington to fund the government and avoid shutdowns.
The blue-chip Dow was up about 1% and the Dow was in the negative territory, while the tech-filled Nasdaq was higher that day.
News of the Senate approving a stopgap spending bill to keep the U.S. government afloat reduced losses in the mid-afternoon.
The three major U.S. stock indexes are on their way to showing their worst quarterly performance since the start of 2020, when the Kovid-1 pandemic epidemic brought the world economy to its knees.
S&P and Nasdaq are poised to show slight gains in the July-September period, while the Dow is heading for a nominal quarterly loss.
For the month, all three indices are on track to post their worst quarterly losses since the September-October period last year, which historically is the weakest and most volatile time of the year for the stock market.
The tug-of-war between growth and price continues for months and quarters. The S&P growth index fell about 5% in September but still has a quarterly profit potential of more than 2%, while prices fell about 3% this month but fell about 1% for the July-September period.
Tim Grisky, chief investment strategist at Inverness Council in New York, said: “Especially this month, the sea has definitely changed, because a few things have happened.”
“The rise in interest rates has led to a spiral of growth stocks, which is related to the rise in inflation expectations, and in fact the Fed raised their near-term expectations for inflation at their last meeting,” Grisky added.
At the more granular, sector level, FAANG Group of Momentum stocks will show a decline of about 4% monthly and more than 3% quarterly.
In addition, transportation stocks, which are widely seen as barometers of economic health, are on track to post a monthly loss of 3% and a quarterly slide of about 5%.
On the economic front, initial unemployment claims have been unexpectedly higher in the third week. Market participants are now looking at data on consumer spending, inflation and factory activity expected on Friday for signs of economic health and the US Federal Reserve’s timeline for its asset purchases and key interest rate hikes.
Fed Chairman Jerome Powell, along with Treasury Secretary Janet Yellen, testified before the U.S. House Financial Services Committee that there was even a rift between Capitol Hill over funding deadlines and potential shutdowns and the threat of credit default.
“Ceiling’s ceiling issue has had a negative impact on stock prices,” Grisky said. “In the short term, politics affects businessmen and people looking for an edge.”
The S&P 500 lost 320.19 points or 0.93% to 34,070.53, lost 16.26 points or 0.37% to 4,343.2 and added 57.74 points, or 0.4%, to 14,570.18.
Among the major sectors of the S&P 500, communications services are enjoying the highest percentage gains, while consumer prices have declined the most.
Progress issues have been reduced in the NYSE ratio of 1.56 to -1; At Nasdaq, a 1.17-to-1 ratio is in favor of priorities.
The S&P 500 posted four new 52-week highs and two new lows; The Nasdaq Composite recorded 5 new heights and 17 new levels.