Wall Street traders could see the quarter end on a more somber note after a big run-up in stock prices, with investors preparing to rebalance their portfolios.
All three indexes were down slightly at the opening bell on Monday. The Dow Jones Industrial Average fell 0.2%; it has gained 8.2% so far in the third quarter, its best quarterly performance in a year. The S&P 500 and the Nasdaq Composite were also down 0.2%, each. Both indexes are still up for the quarter and year.
Still, there’s a full trading day ahead and things could change. Institutional investors, like pension funds and big bank traders, close out their positions to balance their portfolios at the end of every quarter. Outperforming assets get sold. Profits get locked. The goal is to ensure they are meeting their allocations for stocks, bonds, international markets after the quarter’s move.