US jobs rose more than expected in August Wage growth is slipping, while the unemployment rate is rising Early gains fade after Gazprom says it cannot restart deliveries
NEW YORK, Sept 2 (Reuters) – U.S. stocks ended the week lower on Friday as early gains from a jobs report that suggested a labor market may be easing gave way to concerns on the European natural gas crisis. Wall Street opened sharply higher after August’s U.S. payrolls report showed stronger-than-expected hiring, but a rise in the jobless rate to 3.7 percent eased some concerns about the Federal Reserve being too aggressive in raising interest rates as it tries to reduce high inflation. But gains were erased when Gazprom ( GAZP.MM ), the state-controlled company with a monopoly on Russian gas exports to Europe via a pipeline set to restart on Saturday, said it could not safely restart deliveries until it fixed an oil leak found in a vital turbine and did not give a new time frame. read more Sign up now for FREE unlimited access to Reuters.comSign up “Certainly in the afternoon overshadowing the good data from this morning, we were robbed in the afternoon by these non-European stocks,” said Zach Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina. Analysts also pointed to low trading volumes ahead of the long holiday weekend, which is contributing to the exaggeration of market moves. “Regulation is important, there has been some optimism about the European energy situation in the last week or so, long-term electricity prices almost halved in some cases and signs that Germany had nearly 80% of its gas reserves filled. So what we’re seeing is a bit of a position adjustment in that context coupled with low liquidity on a Friday afternoon on a holiday weekend,” Hill said. The Dow Jones Industrial Average (.DJI) fell 337.98 points, or 1.07%, to 31,318.44. the S&P 500 (.SPX) lost 42.59 points, or 1.07%, to 3,924.26. and the Nasdaq Composite (.IXIC) fell 154.26 points, or 1.31%, to 11,630.86. Markets are closed on Monday due to the Labor Day holiday. Traders work at the New York Stock Exchange (NYSE) in New York, U.S., August 22, 2022. REUTERS/Brendan McDermid Energy (.SPNY) was the only major S&P sector to end the session in positive territory, rising 1.81%. While payrolls beat expectations, average hourly earnings rose 0.3% compared with estimates of 0.4%, while the unemployment rate rose to 3.7% from a pre-pandemic low of 3.5%, indicating that the Fed’s efforts to raise interest rates had begun. to enter into force. read more The wage growth data is seen as important to the Fed’s rate hike discussions as the central bank tries to bring inflation, which is at a four-decade high, back to its 2 percent target. Expectations for a third straight 75 basis point hike by the central bank at its September meeting fell to 56%, according to CME’s FedWatch Tool, from 75% the previous day. Focus now shifts to the August consumer price report due in the middle of the month, the last major data available before the Fed’s September 20-21 policy meeting. Fears of aggressive policy tightening sent stocks lower after hitting a four-month high in mid-August, with the S&P 500 (.SPX) down about 7% on the day before Fed Chairman Jerome Powell’s hawkish remarks on last week on rate hikes. His views were later echoed by other policy makers. All three major indexes suffered their third straight weekly loss, with the Dow down 2.99%, the S&P 500 down 3.29% and the Nasdaq down 4.21%. Volume on US exchanges was 9.95 billion shares, compared to the full session average of 10.48 billion over the past 20 trading days. Declining issues outnumbered advancing ones on the NYSE by a ratio of 1.34 to 1. On the Nasdaq, a ratio of 1.65 to 1 favored the decliners. The S&P 500 hit three new 52-week highs and 14 new lows. the Nasdaq Composite recorded 47 new highs and 184 new lows. Sign up now for FREE unlimited access to Reuters.comSign up Report by Chuck Mikolajczak. edited by Jonathan Oatis Our Standards: The Thomson Reuters Trust Principles.
