Dow slips on delta variant concerns | Goldman cuts GDP forecast

TUE, SEP 07, 2021

EVENING BRIEF

AS OF TUE, SEP 07, 2021 • 04:32 ET

DJIA		35100.00
		-0.76%	-269.09

S&P 500		4520.03
		-0.34%	-15.40

NASDAQ		15374.33
		+0.07%	+10.81

Most Active

DOW
NAME	LAST	CHG	%CHG
AAPL	156.69	+2.39	+1.55%
MSFT	300.18	-0.96	-0.32%
KO	55.67	-1.06	-1.87%

S&P 500
NAME	LAST	CHG	%CHG
AAPL	156.69	+2.39	+1.55%
F	12.95	+0.06	+0.47%
BAC	41.32	+0.27	+0.66%

NASDAQ
NAME	LAST	CHG	%CHG
AAPL	156.69	+2.39	+1.55%
AMD	109.15	-0.77	-0.70%
TSLA	752.92	+19.35	+2.64%

EDITOR'S NOTE

The Dow Jones Industrial Average and the S&P 500 slipped Tuesday amid concerns about the fast-spreading delta variant of the coronavirus. The Nasdaq Composite, however, held up in the face of investor selling and notched a record close.

Weighing on investors' sentiment, Goldman Sachs downgraded its outlook for U.S. economic growth, saying in a note to clients that the ramifications from the delta variant and the end of fiscal stimulus measures will dent consumer spending.

Goldman lowered its GDP growth projection to 5.5% for the fourth quarter, down from 6.5% in earlier projections. The firm expects annual growth to be 5.7% in 2021, below the 6.2% expected on average by other shops.

"But the hurdle for strong consumption growth going forward appears much higher: the delta variant is already weighing on Q3 growth, and fading fiscal stimulus and a slower service sector recovery will both be headwinds in the medium term," Goldman's Ronnie Walker said in a note to clients.

Morgan Stanley on Tuesday slashed its rating on U.S. equities, anticipating a volatile period into October as the Federal Reserve prepares to dial back easy monetary policy.

"We see a bumpy September-October as the final stages of a mid-cycle transition play out," Morgan Stanley's chief cross-asset strategist, Andrew Sheets, said in a note. "The next two months carry an outsized risk to growth, policy and the legislative agenda. We lower U.S. equities to [under weight] and prefer stocks in Europe and Japan."

Friday's disappointing jobs report could also be weighing on investor sentiment. Nonfarm payrolls increased by 235,000 in August, the Labor Department reported, but economists surveyed by Dow Jones expected 720,000 jobs.