S&P 500 posts 7-month winning streak as bulls abandon Investing.com buy

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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 collapsed Thursday to end a seven-month winning streak as progress by lawmakers to avoid a government shutdown failed to whet investors’ appetites to buy the decline.

The decline of 1.2%, the decline of 1.6%, or 547 points, the Nasdaq was down 0.44%.

The House supported a short-term supply bill, passed earlier in the Senate, to keep the government running until December 3. President Joe Biden is expected to sign the bill and avoid a government shutdown.

But the drama on Capitol Hill will repeat itself as lawmakers remain deadlocked on plans to raise the debt ceiling, to prevent the U.S. government from defaulting on its obligations by October 18. The prospect of another wave of budget spending has taken a hit, meanwhile, as Senator Joe Manchin, whose vote is needed for Democrats to pass their multibillion-dollar spending program without Republicans backing, would support a $ 1.5 trillion reconciliation program, about $ 2 trillion less than the $ 3.5 trillion proposed.

Along with uncertainty over developments in Washington, economic data showing an increase in jobless claims for a third week fueled fears of a slowing labor market recovery and weighed on sentiment.

In the week ended September 25, jobless claims rose 11,000 to 362,000, missing economists’ expectations of a drop to 330,000.

Cyclical stocks – those that have moved in tandem with the economy – were the worst performers, with financials, industrials and energy stocks trading in the red.

Energy, which is expected to end the month positive, was also dragged down by falling oil prices following Wednesday’s data showing an increase in US inventories as production normalized.

US crude oil production increased an additional 500,000 barrels per day week over week to 11.1 million barrels per day, which can be seen as a normalization following the outages related to the hurricane, ”Commerzbank (DE 🙂 said.

Amid the ongoing political drama, investor sentiment continues to be strained and weigh on the broader market as technology has given up some of its intraday gains.

Apple (NASDAQ :), Microsoft (NASDAQ :), Amazon.com (NASDAQ :), Facebook (NASDAQ 🙂 and Alphabet (NASDAQ 🙂 the Fab 5s, which make up about 25% of the S&P 500, were lower.

The tech woes come even as the appreciation of Treasury yields has paused, although the 10-year yield has continued to trend above 1.5%.

On the earnings side, Bed, Bath, & Beyond, Inc. (BBBY) fell 22% after reporting second-quarter earnings of $ 0.04, well below Wall Street expectations.

CarMax (NYSE :), meanwhile, also posted quarterly results below net income, dropping its shares by 11%.


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