Will September be as bad as August?
The Dow falls nearly 4.5% for the month as stocks suffer modest losses. September, historically a tough month, looms. Markets are closed Monday for Labor Day.
Stocks stumbled out of August, weighed down by what to do about Syria and worries about the Federal Reserve tapering and how it might affect the economy.
Investors now face September, which has been the worst of month of the year for the stock market since 1960. To add to investor jitters, September 2013 is the fifth anniversary of the 2008 market crash.
The Dow Jones industrials ($INDU) and the Standard & Poor's 500 Index ($INX) had their worst monthly declines of the year -- and worst, actually, since May 2012.
Interest rates were little changed, with the 10-year Treasury yield slipping to 2.749% from 2.751% on Thursday and down from a week ago. Gold (-GC) rose more than 6% on the month, while silver (-SI) jumped nearly 20% for the month.
Crude oil (-CL) moved up during the month as tensions over Syria grew, and retail gasoline prices were starting to move higher as well.
The Dow finished Friday down 31 points to 14,810 on Friday. The S&P 500 was off 5 points to 1,633. The Nasdaq Composite Index ($COMPX) dropped 30 points to 3,590. The U.S. markets were closed on Monday for Labor Day.
On Monday, as the United States observed Labor Day, most markets globally rose sharply in part as a result of President Obama's decision to seek Congressional approval to attack Syria. In addition, China's factory activity expanded at the fastest pace in more than a year in August with a jump in new orders.
Late Monday, Microsoft (MSFT) agreed to buy most of Nokia’s (NOK) devices and services business in a $7.17 billion deal that includes Nokia's smartphone operations. (Microsoft is the publisher of MSN Money.)
Futures trading suggested a strong open for U.S. stocks on Tuesday, with the Dow opening up perhaps as many as 120 points.
A good start for September would be welcome given the month's history and after a weak August. The Dow dropped 4.45% in the month; the S&P 500 fell 3.13%. The Nasdaq slipped 1.01%.
Microsoft was the only Dow stock to show a gain for the month, up 4.9%, mostly due to CEO Steve Ballmer's announcement he will retire within 12 months. The losers were Hewlett-Packard (HPQ), down 13% and JPMorgan Chase (JPM), down 9.3%.
Best Buy (BBY), up 19.6%, and Netflix (NFLX), up 16.1%, were the top S&P 500 performers. Abercrombie & Fitch (ANF) was the laggard, down 26.4%. Only 114 stocks in the index were ahead on the month.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was off just 0.5% for the month thanks to gains for such stocks as Netflix, Viacom (VIAB), up 9.3% and Facebook (FB), up 12.2%. The social-media site finished August at $41.29. The Nasdaq-100 was down 20 points on the day to 3,074.
Lots of people are worried about September because it has produced such crummy results: It has been the worst month for the Dow and S&P 500 since 1950 and the worst for the Nasdaq since 1971, according to the Stock Traders Almanac.
The big reasons for its reputation: The market's reactions to the Sept. 11, 2001 terror attacks and the prospect of war with Iraq in 2002 -- and the Lehman Bros. collapse in 2008. The S&P 500 fell 8.2% in September 2001, 11% in September 2002 and 9.1% in September 2008.
And let us not forget September 2011, the Dow fell 6%, with the S&P 500 down 7.2% and the Nasdaq 6.4% as Republicans and Democrats waged trench warfare over raising the debt ceiling.
But September has not always been a dog. September 2010 was the best month for the stock market since the turn of the 21st century. September 2012 produced 2%-plus gains for the major averages.
There are plenty of things to worry about: An economy that may be stagnant, rising interest rates and oil prices, mediocre corporate earnings, an ugly fight over raising the U.S. debt ceiling. And, of course, the worries about the responses a U.S. strike against Syria over poison gas attacks might provoke.
Moreover, the stock market isn't as strong as it was in July. The Dow is off 5.4% from its Aug. 2 record close. The S&P 500 is down 4.5%, and the Nasdaq is down 2.8%.
But the averages are still sporting big gains for the year: 13% for the Dow, 14.5% for the S&P 500 and 18.9%. In August 2008, the Dow was already down 13% for the year, with the S&P 500 off 12.6% and the Nasdaq 10.7%. Financial stocks were off some 25% for the year. They're up 18.6% so far in 2013.
It is true that the major averages are trading below their 50-day moving averages. The 50-day moving average is an important indicator of investor confidence. Not a good sign.
However, the averages are trading at least two percentage points above their 200-day moving averages; the Nasdaq finished Friday 8.6% above its 200-day average. Meanwhile, 73.4% of all S&P 500 stocks are trading above their 200-day moving averages. That doesn't suggest panic.
When August 2008 ended, the Dow and S&P 500 were already trading more than 6% below their 200-day moving averages. Obviously, a lot of people were terrified. The discount between price and moving average would expand to 30% by the time the market bottomed in March.
So, could the market move lower in September? Yes. Since late March, analysts have been arguing a pullback of 8% to 10% is likely. That might bring the Dow down to 14,000 or so and the S&P 500 to 1,500. Ralph Acampora, a veteran analyst with Altaira Wealth Management, believes there could be a shock that could pull the market down more -- with a sharp recovery afterward.
Many bears like to argue the market will fall 30% or 40% from its peaks in early August. But there aren't visible weaknesses like the 2007-2008 housing collapse in view that could bring the credit system to its knees.
For the day on Friday, crude oil in New York fell $1.15 to $107.65 a barrel, ending the week up 1.2%. Regular unleaded gasoline averaged $3.585 a gallon, up 2.1 cents on the day and 4.9 cents to the week.
Gold fell $16.80, or 1.2%, to $1,396.10 an ounce but gained 30 cents on the week and 6.3% on the month.
Materials stocks were flat in August but were the S&P 500's strongest sector. Financial stocks were the weakest sector, down more than 5%.
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|Markets for the Month|
|Aug. 30||July 31||% chg.||YTD chg.|
|U.S. Dollar Index||82.14||81.54||0.74%||2.84%|
|10-yr. Treasury yield||2.75%||2.59%||6.02%||56.55%|
|(per troy ounce)|
Real Unemployment at 12 + %
Bernanke $$$ are going away
Over 1/2 of Americans loosing ground financially
Housing market held up by unrealistic interest rates
Here We GOOOOOOO Again!!!!
VL - It wasn't DC it was Obama that dug up a war reason. He's looking old because 4+ years of failure has that effect. The American - by nearly a 2-1 margin - realize his policies of taxes, debt and unfounded regulations are detrimental to the economy.
When Reagan got Big Government a little bit out of the way in 1982, the American people began a real recovery from a far worse recession as soon as it ended. The economy grew at rates between 5 and 10% during the early stages. This recovery has been at near-recession growth levels for 4 years. You have got to free the people.
You're looking at an OVER INFLATED MARKET:
Stocks will fall another 43% and the housing market will be the albatross due to banks holding onto foreclosed housing ,in their portfolios, rather then placing hundreds of thousands of homes up for sale in an unstable environment which would allow the housing market to reach its own balance but at a tremendous loss of revenue to the banks.
Europe is fully aware what the banking institutions' did with unloading blocks of bad notes to them, they are still trying to regroup and develop a growing economy, which limits their ability to invest in the U.S. instability even if they wanted to.
Remember even though the News Organizations' aren't reporting what is happening in Greece, Italy, Portugal, Spain, and France doesn't mean that the "Financial Crisis" these countries are having hasn't gone away and the economical sickness felt there will continue to spread across the world.
what the hell is 'Limited Narrow Attack'?? we throw a few missiles 'somewhere' and go home?? gee wonder what you sycophant obamazombie loony toons would be saying right now if Bush said that!!
, heh wow thank God you libs claim this idiot as your own, my God what an insane, 'Messianic complexed whackjob! obama actually bought his own press! this Marxist wacko is coming unwrapped!! he bluffed, Syria called it and now he's throwing a hissy fit, so he's gonna throw missiles around and pretend to be a tough leader, hehehe soooooooooooooooooo pathetic!
meanwhile the people are the ones getting bombed!! ruined financially, the hell with August the hell with the market, John Q. Public sure as hell isn't investing his savings in it! he barely has any thanx to osamanomics!
Don't you just love it when the phony black messiah brings the world together, cuz it sooooo loves America now! more threats against Israel, the Iraqies are threatening us now! (weren't we down THAT road before for God's sake!), Iran says it wants to attack 'of course' Israel, Egypt is burning, Coptic Chritians being attacked and killed, their churchs burned to the ground, SOUND FAMILIAR AZZWIPE LIBERAL PHONY BLEEDING HEAT PSYCHOPATHS!! something the Nazis did pre-WWII! my GOD this bastard obama is destroying the entire world! simply cuz he's black...NO OPPOSITION from the RePUSSYcant's!!! and he still didn't lower the rising sea water! damn!!!! I so wanted to see him do that!!
Wasnt this one of oblamos Recovery Summers...?
How many Recovery Summers has he now had...?
Folks there will be NO Recovery anything, willout JOBS for the American People...
Now.. how will adding 12 million ILLEGAL Mexicans help anything...?
Our stock market has been a hoax. It will easily drop another 10% and 20-40% more would not surprise me.
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Do it once a year. This allows the best-performing asset classes to take off and run.
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