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.

By Charley Blaine Aug 30, 2013 5:20PM
Stock market report © CorbisUpdated: 12:44 a.m. ET, Tuesday

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%.

More from Top Stocks

Markets for the Month



Aug. 30

July 31

% chg.

YTD chg.
Dow Industrials

14,810.31

15,499.54

-4.45%

13.02%
S&P 500

1,632.97

1,685.73

-3.13%

-62.43%
Nasdaq 

3,589.87

3,626.37

-1.01%

18.89%
Russell 2000

1,010.90

1,045.26

-3.29%

19.02%
Crude oil 

$107.65

$105.03

2.49%

17.24%
(per barrel)











U.S. Dollar Index 

82.14

81.54

0.74%

2.84%
10-yr. Treasury yield

2.75%

2.59%

6.02%

56.55%
Gold

$1,396.10

$1,313.00

6.33%

-16.69%
(per troy ounce)











189Comments
Aug 30, 2013 8:39PM
avatar

Gee----

 

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!!!!

Aug 30, 2013 6:14PM
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What do we really have here, Charley? The markets aren't falling because of some trend... we have NO ECONOMY and DC just dug up a war reason. Has anyone... anyone at all... done ANYTHING about financial tyranny and banking corruption? Nope. Obama looks mighty old lately. Maybe it's from being jerked around by useless people who only care about wealth power and omnipotence. Trillions were printed up to "ease" things. Did we get easing or screwing? As much as the Ivy League thinks it can Exit Stage Right without a fight... the likely scenario is bloodshed. We don't need a war, we need careers restored, Master degrees creating new enterprises or going bust and trailer trash like Crazy 8 financially ruined and just being trailer trash again.
Aug 30, 2013 7:59PM
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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.

Aug 30, 2013 6:42PM
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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.

 

 

Aug 30, 2013 6:59PM
avatar
never-mind that, can anyone of you dirtbag deranged liberals explain your Lunatic 'n Chief's riDICulous comment on a Syrian attack?

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!!
Aug 30, 2013 6:07PM
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August was not good, however, with a balanced, somewhat conservative portfolio we lost 2,7% rather than 4,45% the market lost. By the same token, we will never make the maximum in an up market, but that is ok.
Aug 30, 2013 9:48PM
avatar
MR. PRESIDENT
                               Are you trying to drum up some jobs By starting a war?
 If you are,, you really suck at it.  Maybe you should try your hand as a   COMMUNITY ORGANIZER
                                                        Are you trying to deflect everything that is going on in this country at this time by  WAGGING THE DOG ??????
Aug 30, 2013 7:42PM
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There is no good economic news but the Obamamedia keeps attempting to twist it in his favor and turn a blind eye to what's really happening.  The U6 unemployment rate tells it all at almost 15%, seven full percent above the U3 rate when it historically has been about 2 to 4% above it.  Why?  Few if any corporations believe in anything that Obama has done and are going to have to wait it out to see what surprises the executive-order-in-chief has for them.
Aug 30, 2013 7:50PM
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Ex-republican, wow, talk about lambs leading lions. Hang up your war mongering ways.
Sep 2, 2013 12:34AM
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So the US intelligence community had information pointing to the Syrian preparation for a chemical attack 3 days before August 21st.  The rebels want to know why the US didn't tell them. Me thinks Sunni and Shiite Muslims have killed 100,000 of their own with bullets, explosives and other devices so why should we care about the last 1,400 killed by chemicals. One of their idiot fanatics killed 2,500 on 911. We ought to get the hell out of the Middle East and let them kill all of themselves that they can.  The worst situation a bystander can get into is between two parties in a domestic dispute.
Aug 30, 2013 6:17PM
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Will Sept be as bad?  Ask Bernanke - only he knows.
Aug 30, 2013 7:55PM
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Ex-repub was busy yesterday, walked off his job to be part of the fast food protests........
Aug 30, 2013 7:02PM
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SRTdriver;Don`t worry about it.It`s way over your head.
Sep 1, 2013 6:02PM
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 How many trillions of Obozo Debt of Big Ben's welfare will it take ? With the lowest labor participation rate since 1979 may I ask DEMOCRATS are you really this brainwashed ? Good God ! We have Wall Street sucking welfare from Big Ben and you morons drool over food stamps? This Obozo creep drags out a red crayola with his constant gum flapping and demands "Congress" bail out his moronic mouth?  Comical drooling losers you democrats really are ! How about Iraq is this scum bag concerned he left Iraq ? Iraq is just as it was before the Serge he the academic gum flapping idiot OPPOSED. Really have you morons any shame?  Only two kinds of democrats pure stupid or pure evil. YOU democrats remind me of Goose Stepping Hitler Youth brainwashed fools government loving freaks ! The ultra rich are rolling in the Nazi corruption of government and wall street and you morons own nothing but DEBT damn idiots!
Sep 1, 2013 7:59PM
avatar

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...?

Aug 31, 2013 10:13PM
avatar
Does anyone else remember candidate Obozo telling us all that he would go to our allies and they would all support HIM.  I guess even with supposed Syrian WMD's they liked Bush more.   Evidently only the FRENCH support President Obozo..  LOL

Our stock market has been a hoax.  It will easily drop another 10% and 20-40% more would not surprise me.

Aug 30, 2013 9:59PM
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No drinky...Don't want to miss this Circus.
Sep 1, 2013 12:16AM
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quite simply - no, it will likely be worse and october could make those two months look like two misbehaving schoolboys put alongside genghis khan ... economic reality will be a harsh truth for the market to face, but we can only delay the inevitable for so long.  the question is - how long will we put off this day of reckoning and how much worse are we making the final consequences with each delaying tactic and lie?
Sep 1, 2013 8:47PM
avatar
For those of you still into this Syria thing here is the latest sans liberal media. For some time now this Administration has been supplying certain rebels fighting the Assad regime.There were some 400 surface to air missles being transferred through Benghazi in support of these rebels.  Someone talked and they were stolen from the makeshift American Embassy there and the 4 Americans were killed in the robbery. There have already been some 9 to 14 instances where the Assad forces have used chemical weapons.  Some of these were as early as last January.  The underlying rub in this whole mess is about two weeks ago the Assad forces  amassed a large advantage and the plight of the rebels appears to be dimming as they are in peril at this time.  This administration is using these chemical events as an excuse to jump in and attempt to save the rebels by inflicting damage from the air on the Assad force.  This Administration has told so many half truths, used misinformation, or outright lied to the American people.  Did you really think anything different would happen? So the real story is do we bomb Syria in the support of the presently losing rebels? 
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