Wall Street falls as investors digest jobs data and Gazprom is suspended

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, August 22, 2022. REUTERS/Brendan McDermid

(Reuters) – Wall Street’s main indexes fell in afternoon trading on Friday as investors digested mixed jobs data, while renewed concerns about the European gas crisis prompted investors to sell shares as a long weekend approaches.

The three major indices opened sharply higher after jobs data showed stronger-than-expected employment but a rise in the unemployment rate which eased some concerns about aggressive rate hikes from the Federal Reserve.

“Investors are rethinking the August jobs report and may be leaning toward the fact that there is no clear end to price increases. Higher rates provide competition for stocks,” said Rick Meckler, partner at Cherry Lane Investments.

Adding to concerns, Russia on Saturday canceled the deadline for resuming gas flows through the Nord Stream 1 pipeline, one of the main supply routes to Europe, after it said it had discovered a fault during maintenance, deepening Europe’s difficulties in securing fuel for the winter. Read more

Russia’s state-controlled oil company Gazprom said it could safely resume deliveries only after an oil leak found in a vital pipeline turbine was repaired. He did not give a new time frame.

“I’ve already seen Gazprom’s headlines, and that’s clearly not good news,” said Joe Saluzzi, co-director of trading at Themis Trading in Chatham, New Jersey.

Analysts also pointed to weak trading volumes ahead of the extended weekend helping to exaggerate market moves.

“Volume is very light because it is a Friday before a three-day weekend that sometimes tends to empty this liquidity,” Saluzzi added.

Markets are closed on Mondays due to Labor Day.

CBOE Volatility Index (.VIX)also known as Wall Street’s fear gauge, rose to 25.5 points after hitting a one-week low earlier.

Nine of the 11 major sectors of the Standard & Poor’s Index fell. All sectors rose earlier after the Labor Department report showed that US employers hired more workers than expected last month.

However, average hourly earnings rose 0.3% compared to estimates of 0.4%, while the unemployment rate rose to 3.7% from its pre-pandemic low of 3.5%, indicating that the Fed’s interest rate hike efforts have begun to the influence. . Read more

Wage growth data is seen as important to the Fed’s deliberations on raising interest rates as the central bank looks to return inflation, which is at a four-decade high, to its 2% target.

The focus now turns to August’s consumer price report due mid-month, the last major data available ahead of the Fed’s policy meeting on September 20-21.

Fears of an aggressive tightening policy have gripped Wall Street recently, with the S&P 500 index (.SPX) It’s down about 4.5% since Fed Chairman Jerome Powell’s hawkish comments last week about raising interest rates. His views were later echoed by other policymakers.

All three major indicators are set for the third consecutive weekly loss.

At 1:39 p.m. ET, the Dow Jones Industrial Average (.DJI) It was down 186.98 points, or 0.59%, to 31,469.44 points, the Standard & Poor’s 500 (.SPX) The index fell 26.50 points, or 0.67%, to 3,940.35 points, and the Nasdaq Composite Index (nineteenth) It was down 113.37 points, or 0.96%, to 11,671.75 points.

energy stock (.SPNY) It advanced 1.6% as oil prices rose nearly 2% ahead of the OPEC+ meeting to discuss potential production cuts.

Advance issues outnumbered losers by 1.08 to 1 on the New York Stock Exchange. Declining issues outnumbered stocks advancing by 1.40 to 1 on the Nasdaq.

The S&P recorded three new highs in 52 weeks and five new lows, while the Nasdaq recorded 41 new highs and 127 new lows.

Volume on US exchanges was 6.52 billion shares, compared to an average of 10.31 billion shares for the full session over the last 20 trading days.

Additional reporting by Devik Jain and Sruthi Shankar in Bengaluru; Edited by Sriraj Kalovila and Magu Samuel

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