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Stock Market News for Sep 10, 2021

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·4 min read
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U.S. stock markets closed lower on Thursday as investors await the decision of the U.S. Federal Reserve with regard to the monetary policy. Investors’ sentiment was also dented as the European Central Bank decided to slow down the pace of net asset purchases. All the three major stock indexes closed the day in red.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.4%, or 151.69 points, closing at 34,879.38, continuing its losses from the previous three sessions. Notably, 22 components of the 30-stock index ended in red while seven finished the day in green and one remained unchanged. Major losers of the Dow were Amgen Inc. AMGN and Johnson & Johnson JNJ that lost 2.4% and 2.2%, respectively.

The tech-heavy Nasdaq Composite closed the day at 15,248.25, down 0.3%, continuing its losses from Wednesday, on the back of weak performance by large-cap technology stocks. Shares of heavyweight technology companies like Microsoft Corp. MSFT and Intel Corp. INTC fell nearly 1% and 0.3%, respectively. Microsoft carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 fell 0.5%, closing the day at 4,493.28, maintaining its four-day losing streak. The Real Estate Select Sector SPDR (XLRE) and the Health Care Select Sector SPDR (XLV) fell 2.1% and 1.2%, respectively. Eight out of eleven sectors of the benchmark index closed in the negative zone and three closed in the green.

The fear-gauge CBOE Volatility Index (VIX) was up 4.7% to 18.80. A total of 9.3 billion shares were traded on Thursday, higher than the last 20-session average of 9.1 billion. Decliners outnumbered advancers on the NYSE by a 1.03-to-1 ratio. On Nasdaq, a 1.12-to-1 ratio favored advancing issues.

Markets Await Federal Reserve’s Comments on Monetary Policy

The Dow and the S&P 500 ended Thursday’s session registering losses for the fourth consecutive session while the Nasdaq Composite also declined for the second consecutive day as investors await the U.S. Federal Reserve’s decision on monetary policy.

The Federal Open Market Committee is set to conduct its two-day policy meeting beginning Sep 21 and market participants are waiting to see whether the Fed takes any decision with regard to the scaling back of the $120 billion monthly bond buying program that it started during the pandemic to support the economic recovery. Moreover, concerns about the Delta variant of COVID-19 have dented the confidence of investors in recent sessions.

European Central Bank to Slow Pace of Net Asset Purchases

The European Central Bank (“ECB”) stated on Thursday that it would “moderately lower pace” of net asset purchases under the pandemic emergency purchase program that was implemented in March 2020, as inflation surges. In August, preliminary estimates showed that consumer prices in the euro zone increased 3% year over year, marking the highest reading in 10 years, and following a rise of 2.2% in July. However, the ECB kept its monetary policy and interest rates unchanged.

Economic Data

The U.S. Department of Labor reported that initial jobless claims decreased by 35,000 to 310,000 for the week-ended Sep 4. This marked the lowest level for initial claims since Mar 14, 2020 when it was reported at 256,000. The consensus estimate was 342,000 and the previous week’s data was revised upward by 5,000 to 345,000 from 340,000 reported earlier.

Continuing claims (people who are already receiving benefits) decreased by 22,000 to 2,783,000 for the week-ended Aug 28 from the prior week’s revised level. This also marked the lowest level for continuing claims since Mar 14, 2020 when it was reported at 1,770,000. The previous week’s level was revised upward by 57,000 to 2,805,000 from 2,748,000 reported earlier.

The four-week moving average for continuing claims decreased by 29,000 to 2,840,250. This also marked the lowest level for the average since Mar 21, 2020 when it was reported at 2,071,750. The prior week’s average was revised upward by 14,250 to 2,869,250 from 2,855,000 reported earlier.

The Energy Information Administration reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) for the week ending Sep 3, decreased by 1.5 million barrels per day from the previous week. The report stated that crude oil inventories are below the five-year average by about 6%.


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