It wasn’t long before fears about stocks in September came true. It’s already proving to be a difficult month, especially for some S&P 500 stocks.
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Eleven stocks in the S&P 500, including consumer discretionary plays like Wynn Resorts (WYNN) and Las Vegas Sands (LVS), plus biotech Biogen (BIIB), are already down more than 10% in September, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. And the dreaded month is only half over.
And that’s just the extreme of a disturbing shift in the month. The S&P 500 is already down 2% in September. That might not sound all that bad until you consider it interrupts the S&P 500’s streak of seven-straight monthly gains. The S&P 500 rose 2.9%, on average, in each of the past seven months. And it also means investors are down nearly $900 billion — just this month so far, says Wilshire Associates.
“There’s no doubt the downside risks are piling up and are coming from a variety of areas, be it inflation and monetary tightening, Covid … (and) energy prices,” said Craig Erlam, market analyst at Oanda. “The list goes on.”
Losses Mount For S&P 500, Beyond
Most S&P 500 investors are conditioned to cower a bit in September. And for good reason.
September is the market’s worst month of the year going all the way back to 1950, says “Stock Trader’s Almanac.” All three major market indexes lost more ground in the ninth month than in any other of the year. Specifically, the S&P 500 dropped 0.4%, on average, in September. And it’s fallen more than half the time.
And this September is following the script. The market peaked on Sept. 2, putting $8.1 trillion into investors’ pockets this year through then, says Wilshire Associates.
But the tide is reversing, fast.
The market is now down 1.5% from that market high, erasing more than a trillion dollars of wealth. But the worry is that even more gains might slip away. And for a growing number of S&P 500 stocks, that’s appears likely.
So far, 370 stocks in the S&P 500, or roughly 75%, are down in September. And more than 100 S&P 500 stocks are off 5% or more in September. But clearly there’s even more pain to be endured.
Asian Casinos Hit Hard
China’s crackdown on a number of industries is bleeding into U.S. markets. And in September, the casino operators in Macau are suffering most.
Wynn Resorts, which runs 252,00 square feet of casino space in China’s special gambling district Macau, is feeling the most pain. Shares are down more than 18% just in September. That’s the largest percentage decline during the month of any S&P 500 stock. And it’s followed closely by a 14.4% drop by Las Vegas Sands.
Analysts are aggressively slicing their 52-week price targets on both casinos as regulatory pressure from China heats up. Wall Street analysts have slashed their price target on Wynn by more than 10% since July as worries mount.
Drug Companies Suffer In September
A number of key drug companies also led the way lower in September. Biogen continues to sputter as its Alzheimer’s disease drug stokes controversy and hesitancy in the industry.
Shares of Biogen dropped 11.5% in September so far. The company needs new products to fill its pipeline. Biogen’s adjusted profit per share is expected to plunge by roughly half in 2021. Eli Lilly (LLY) and AbbVie (ABBV) shares, too, are off more than 10% so far in September.
Investors might hope selling will ease. But the pressure is already mounting.
S&P 500 Stocks Suffering Most In September
| Company | Ticker | Stock Sept. % ch. | Sector |
|---|---|---|---|
| Wynn Resorts | (WYNN) | -18.2% | Consumer Discretionary |
| Las Vegas Sands | (LVS) | -14.4% | Consumer Discretionary |
| Hewlett Packard Enterprise | (HPE) | -12.4% | Information Technology |
| Biogen | (BIIB) | -11.5% | Health Care |
| Kroger | (KR) | -11.1% | Consumer Staples |
| Eli Lilly | (LLY) | -10.9% | Health Care |
| AbbVie | (ABBV) | -10.8% | Health Care |
| Nucor | (NUE) | -10.8% | Materials |
| International Flavors & Fragrances | (IFF) | -10.7% | Materials |
| MarketAxess Holdings | (MKTX) | -10.5% | Financials |
| A. O. Smith | (AOS) | -10.2% | Industrials |
| Martin Marietta Materials | (MLM) | -10.1% | Materials |
Sources: IBD, S&P Global Market Intelligence
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