Ugly Kick-Off to September and Anxiety over Banks’ Health

The September started with a downfall in the US stocks and continued to stumble for the third day on Tuesday, scared of the US banks condition being getting down and slumping to a record. The stocks fell to a significant extent since mid of August including the three major indexes down fall. According to the Reuters, September began living up to its reputation as the worst month for stocks as elevated anxiety pushed the three major indexes down 2 percent for the day, their worst percentage losses since Aug 17.

“People started selling into good macro news since a few days ago, and that was accelerated today by a couple banks today,” said Michael James, senior trader at Wedbush Morgan in Los Angeles, adding that growing anxiety was creating major weakness in the market.

The wave of selling on Wall Street was led by the financial sector and came in the face of a pair of better-than-expected economic reports that revealed the sharpest increase in pending home sales since June 2007 and the first expansion in the U.S. manufacturing sector in nearly two years. After initially cheering those reports, the markets headed south and didn’t look back.

“While there is nothing negative about the data, I think it’s more market sentiment driving stocks’ direction,” he said that “There are far more people looking to sell stocks than buy stocks, which is a change in sentiment from the last several weeks.”…read more

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