A rough finish for a tough month for the stock market. September came to a close with the biggest monthly drop since the start of the health crisis.
The Dow tumbled 546 points on Thursday. The S&P 500 dropped 51. The Nasdaq fell 63… For the month: stocks were down nearly 5 percent - the worst monthly drop since March 2020.
Investors nervously watched as political debate continued in Washington over the debt ceiling and President Biden's signature infrastructure spending plans, even though a government shutdown has been avoided for now.
The third weekly rise in first-time applications for jobless assistance also spooked the market.
Initial claims for unemployment benefits rose 11,000 to a seasonally adjusted 362,000 for the week ended Sept. 25.
The number caught Blueprint Capital Advisors CEO Jacob Walthour off guard.
"The initial jobless claims numbers being up, I must admit, was a complete surprise to me, you know, given this backdrop of 10 million job openings. Almost every place I go from Popeye's Fried Chicken to Starbucks to, you know, local mom and pop smoothie shops have help wanted signs in their windows. And so it was really a surprise to me."
The Labor Department cited a change in the way California is classifying the unemployed.
Economists belief the labor market recovery remains intact despite the recent uptick in unemployment claims, which is also being tied to workers scared to go back to work because of the health crisis and those who would rather get fired than get the vaccine.
In individual stock action, shares of Bed Bath and Beyond were hung out to dry. The retailer missed quarterly sales and profit forecasts and slashed its full-year outlook citing supply chain disruptions and a slowdown in consumer spending due to the health crisis. The stock lost more than one-fifth of its value in just one day.
Kohl's was another retailer slammed on Wall Street. Bank of America downgraded the stock on fear that supply chain disruptions will hamper that department store's recovery. That stock was down more than 12 percent.