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Sept. 30, 2021, 4:53 p.m. EDT

Dow books worst month since Oct. 2020, skids 550 points in final session of September

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By Thornton McEnery and Mark DeCambre

U.S. stocks close lower Thursday, despite last-minute moves from Congress to avert a partial government shutdown, as Wall Street wrapped up the last trading day of a tough September and third quarter.

Investors also were parsing testimony from Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, who appeared before the House Financial Services Committee.

How did the indexes trade?

  • The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.70% declined 546.80 points, or 1.6%, lower to end at 33,843.92.

  • The S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.14% closed down 51.92 points or 1.2% lower at 4,307.54.

  • The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.33% fell 63.86 or 0.4% to end at 14,448.58.

For the month, the Dow recorded a 4.3% decline, and the S&P 500 was down 4.8%, snapping a seven-month winning streak. The Nasdaq Composite was off 5.3%, its worst September in a decade. For the quarter, the Dow was down 1.9%, the S&P 500 was up 0.2% and the Nasdaq Composite was up 0.4%.

What drove the market?

Congress voted through a short-term spending bill to keep the U.S. federal government running through early December, acting with only hours remaining before a partial shutdown. Congress has yet to raise the federal debt ceiling though.

The House is still aiming to pass a roughly $1 trillion infrastructure bill already passed by the Senate, but which may be in doubt as Democratic factions are threatening to block the bill unless moderate members sign on to supporting a separate, broader bill focused on climate change, education, and healthcare .

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

The Treasury Secretary at Thursday’s hearing reiterated that a failure to raise the debt limit would have catastrophic implications for markets and the U.S. economy.

Several other government officials spoke Thursday, including Atlanta Fed President Raphael Bostic, who said it’s time to start phasing out emergency pandemic aid because the U.S. economy has strengthened enough.

On the data front, the number of people who applied for U.S. unemployment benefits in late September rose to a two-month high, but much of the increase took place in California. New jobless claims paid traditionally by the states rose by 11,000 to 362,000 in the seven days ended Sept. 25,  the government said Thursday .

Economists polled by The Wall Street Journal had estimated new claims would total a seasonally adjusted 330,000.

Putting September’s turbulence in perspective was the performance of the CBOE Volatility Index /zigman2/quotes/210598281/delayed VIX -5.46% , which finished almost 40% higher for the month, according to FactSet.

But some market experts were more sanguine about how investors are digesting this early fall harvest of macro concerns.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
34,601.10
+579.06 +1.70%
Volume: 192.08M
Dec. 2, 2021 11:51a
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/zigman2/quotes/210599714/realtime
US : S&P US
4,564.67
+51.63 +1.14%
Volume: 1.10B
Dec. 2, 2021 11:51a
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/zigman2/quotes/210598365/realtime
US : Nasdaq
15,305.15
+51.10 +0.33%
Volume: 2.10M
Dec. 2, 2021 11:51a
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/zigman2/quotes/210598281/delayed
US : Cboe Indices
29.42
-1.70 -5.46%
Volume: 0.00
Dec. 2, 2021 10:36a
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