Posted by on September 20, 2021 9:54 am
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Categories: Breaking News News

Dow sheds more than 400 points amid growing risks, on pace for its worst sell-off since July

Dow sheds more than 400 points amid growing risks, on pace for its worst sell-off since July

Originally appeared on CNBC.com

U.S. stocks began the week deeply in the red as investors continued to move to the sidelines in September amid several emerging risks for the market.

The Dow Jones Industrial average lost 450 points, or 1.2%, set for its biggest one day drop since July 19. The blue-chip Dow pared back some of the losses soon after the open when it dropped nearly 600 points. The S&P 500 fell 1.3%. The tech-heavy Nasdaq Composite dropped 1.5%.

There were a number of reasons for the sell-off:

  • Investors fear a contagion sweeping financial markets from the troubled China property market. Hong Kong equities saw a big sell-off during the Asia trading session on Monday. The benchmark Hang Seng index plunged 4% with embattled developer China Evergrande Group on the brink of default.
  • The Federal Reserve begins a two-day meeting Tuesday and investors are worried the central bank will signal it’s ready to start pulling away monetary stimulus amid surging inflation and improvement in the job market.
  • Covid cases because of the delta variant remain at January levels as colder weather approaches in North America.
  • September has the worst track record of any month, averaging a 0.4% decline, according to the Stock Trader’s Almanac. History shows the selling tends to pick up in the back half of the month.
  • Investors are also concerned about brinkmanship in DC as the deadline to raise the debt ceiling approaches. Congress returned to Washington from recess rushing to pass funding bills to avoid a government shutdown.

Stocks linked to global growth were down the most Monday. Ford and Carrier Global lost more than 3%. General Motors and Boeing fell about 2% each. Nucor steel shed 2.8%

Energy stocks tumbled as WTI crude oil fell 2% on concerns about the global economy. Occidental Petroleum, Hess and Devon Energy were among the biggest losers in premarket trading.

Bond prices gained as investors sought safety. The move pushed the 10-year Treasury yield down by 4 basis points to 1.329%.

Originally appeared on CNBC.com

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