Stocks Lower in Volatile Day of Trading…..

U.S. equities accelerated to the downside late in the day to finish near their lows after a choppy trading session, as investors appeared to tread cautiously ahead of the unofficial start of Q3 earnings season and the first look at the September inflation landscape that comes tomorrow. Treasuries were mixed after the bond markets returned to action following yesterday’s holiday, and the U.S. dollar gained ground with the greenback continuing to move above levels not seen in a year. Meanwhile, crude oil prices were little changed on the heels of a recent surge and gold was modestly higher. In economic news, small business optimism dipped in September as inflation and labor shortages continued to impact business, while demand for labor remained robust in August after coming off a record high. On the equity front, Fastenal Company posted in line earnings and noted that strong demand was being somewhat countered by the lingering COVID-19 impact and cost inflation, and Valvoline said it is pursuing separating its two business segments. Overseas, stocks in Europe were mixed, while markets in Asia were mostly lower.

The Dow Jones Industrial Average declined 118 points (0.3%) to 34,378, the S&P 500 Index decreased 11 points (0.2%) to 4,351, and the Nasdaq Composite lost 20 points (0.1%) to 14,466. In moderate volume, 781 million shares were traded on the NYSE and 4.0 billion shares changed hands on the Nasdaq. WTI crude oil nudged $0.12 higher to $80.64 per barrel. Elsewhere, the gold spot price increased $6.20 to $1,761.90 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—advanced 0.2% to 94.50.

Small business optimism misses amid labor shortage, job openings dip from a record…..

The National Federation of Independent Business (NFIB) Small Business Optimism Index for September dipped more than expected to 99.1 from August’s 100.1 level, and compared to the Bloomberg estimate of a decline to 99.5. The report pointed out that inflation and labor shortages continue to impact business operations. The NFIB said, “Small business owners are doing their best to meet the needs of customers, but are unable to hire workers or receive the needed supplies and inventories.” The report also noted that the outlook for economic policy is not encouraging to owners, as lawmakers shift to talks about tax increases and additional regulations.

As labor shortage remains a drag on business sentiment, the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, showed a retreat to 10.44 million jobs available to be filled in August, from July’s upwardly-revised record high of 11.10 million. The consensus estimate called for a 10.95 million level. The report showed the hiring rate declined to 4.3% from July’s 4.6% pace, and separations rose to 4.1% from the prior month’s 3.9% pace. The quit rate increased to 2.9% from July’s 2.7% rate.

Treasuries were mixed but have seen pressure as of late and the yield curve has steepened as the markets grappled with expectations that the Fed is set to begin to rein in its extraordinary measures put in place to combat the impact of the pandemic, against the backdrop of persisting inflation pressures.

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