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S&P 500 fell 4.8% in September, worst month since March 2020

The S&P 500 fell 1.2% Thursday, after selling accelerated in the final hour of trading. The benchmark index is still up 14.7% for the year. (Associated Press)
By Damian J. Troise </p><p>and Alex Veiga Associated Press

Stocks on Wall Street fell broadly Thursday, closing out September with their worst monthly loss since the beginning of the pandemic.

The S&P 500 ended the month 4.8% lower, its first monthly drop since January and the biggest since March 2020, when the viral outbreak rattled markets as it wreaked havoc with the global economy.

After climbing steadily for much of the year, the stock market became unsettled in recent weeks with the spread of the more contagious delta variant of COVID-19, a sudden spike in long-term bond yields and word that the Federal Reserve may start to unwind its support for the economy.

The S&P 500 fell 1.2% Thursday, after selling accelerated in the final hour of trading. The benchmark index is still up 14.7% for the year.

“It’s not really surprising that we’re seeing a weaker September because historically its the worst month on average,” said Jay Pestrichelli, CEO, of investment firm ZEGA Financial. “Unfortunately, there’s not a lot of information to glean for October from it.”

The S&P 500 fell 51.92 points to 4,307.54, and is now 5.1% below its all-time high set on Sept. 2. The September swoon cut into the index’s gains for the third quarter, leaving it only 0.2% higher. That’s its smallest quarterly gain since the pandemic first stunned the economy and financial markets.

The Dow Jones Industrial Average fell 546.80 points, or 1.6%, to 33,843.92, while the Nasdaq slid 63.86 points, or 0.4%, to 14,448.58. Small company stocks also lost ground. The Russell 2000 index fell 20.94 points, or 0.9%, to 2,204.37.

Bond yields edged lower. The yield on the 10-year Treasury note, a benchmark for many kinds of loans, fell to 1.50% from 1.54% from late Wednesday. It was as low as 1.32% just over a week ago.

All the sectors in the S&P 500 ended in the red Thursday, with technology stocks, banks and a mix of companies that provide consumer goods and services accounting for much of the pullback. More than 90% of the stocks in the index fell.

The broader market stumbled through September as investors tried to get a clearer picture of the economy’s path amid inflation concerns and uncertainty about how COVID-19 will continue to impact industries and consumers. In recent weeks, economic data has revealed that the highly contagious delta variant has crimped consumer spending and the job market’s recovery.

The weak signals for economic growth continued Thursday as the Labor Department reported unemployment applications rose for the third straight week and were higher than economists anticipated. The Commerce Department upgraded its estimate of economic growth during the second quarter to 6.7%, which was slightly better than economists expected, but they expect growth to slow to 5.5% during the third quarter.