US stocks fall again in ‘exhausted’ market

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NEW YORK – Wall Street stocks ended lower again on Thursday (Sept 9) as markets weighed better employment data against uncertainty over US monetary policy and President Joe Biden’s infrastructure package.

US jobless claims dropped for a second straight week, hitting a new pandemic low and getting closer to their level before Covid-19 broke out.

Meanwhile, the European Central Bank (ECB) said it would slow the pace of its massive monthly bond purchases and lifted its growth forecast for this year.

Though not a taper, the move is “an indication that the European Central Bank is beginning the process of lowering the level of accommodation,” said Tom Cahill, portfolio strategist at Ventura Wealth Management.

The ECB move underscores questions about the Federal Reserve’s plans to scale back asset purchases at a time when there is already uncertainty about congressional action on Biden’s infrastructure plan.

“The market is really, really extended, and I think it’s exhausted,” Cahill said.

“It’s looking for some kind of a catalyst right now.”

The Dow Jones Industrial Average dropped 0.4 per cent to 34,879.38.

The broad-based S&P 500 declined 0.2 per cent to 4,493.28, while the tech-rich Nasdaq Composite Index shed 0.3 per cent to 15,248.25.

Major US carriers such as American Airlines and United Airlines rallied more than two percent despite warning of lower third-quarter sales due to the latest Covid-19 wave.

However, analysts said the downcast company statements had been expected. Investors also appeared to take solace in commentary from some of the carriers that the dip in demand from the Delta variant was smaller than the hit from earlier Covid-19 outbreaks.

Also higher was Moderna, which surged 7.8 per cent after announcing that it is developing a vaccine that would combine a booster shot for Covid-19 with a seasonal flu innoculation.

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