Stocks Slide As Investors Seek Shelter from Several Storms

Stocks in the United States followed the global sell-off on Monday, extending the stock market decline into a fourth week.

The Dow Jones Industrial Average was off its lows of the morning but still closed down by 510 points, a 1.85 percent decline. The S&P 500 was off by 1.16 percent, with all 1o of its 11 sectors down. The Nasdaq Composite managed to end the day nearly flat, closing down just 0.13 percent. The small-cap Russell 2000 plunged 3.43 percent.

Opinions vary quite a bit about what’s behind the extended sell-off that has controlled much of the action in the stock market in September. Some of the factors widely cited include the lack of a fiscal-stimulus agreement, an increasingly acrimonious election season, Donald Trump lagging in opinion polls, heightened tensions with China, the threat of renewed lockdowns as coronavirus cases surge once again across Europe, and a traditional wariness about being long equities going into the autumn months.

Traditional stock market lore has it that it is best to be out of stocks through the Jewish High Holidays. According to legend, Bernard Baruch once sold his stocks on Rosh Hashanah and avoided a huge market crash. Jeff Hirsh, editor of The Stock Traders Almanac,  looked at the data and found that since 1971 the Dow lost on average about 0.5 percent between Rosh Hashanah and Yom Kippur.  In 22 of the years between 1971 and 2018, stocks gained. In 26, they lost or declined.