Wall Street ends the week on a bearish note as jobs report fades

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

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  • US jobs increased more than expected in August
  • Wage growth declines, while unemployment rises
  • Early gains fade after Gazprom said it could not resume deliveries

NEW YORK (Reuters) – U.S. stocks closed the trading week lower on Friday, as early gains from a jobs report that showed a labor market that may begin to recede gave way to concerns about the European gas crisis. .

Wall Street opened sharply higher after the US jobs report for August showed stronger-than-expected employment, but a rise in the unemployment rate to 3.7% eased some concerns that the Federal Reserve has been too aggressive in raising interest rates as it tries to bring down high inflation. .

However, the gains were erased after Gazprom (GAZP.MM)The state-controlled company that has a monopoly on Russian gas exports to Europe via the pipeline that was due to resume on Saturday said it would only be able to safely resume deliveries after an oil leak found in a vital turbine was repaired and did not offer any new component. Time frame. Read more

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“Certainly an afternoon overshadowed by the good data from this morning, the afternoon was stolen from us by those headlines from Europe,” said Zack Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

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

“The setting is important, there has been some optimism about the energy situation in Europe over the past week or so, long-term energy prices have almost halved in some cases, and indications that Germany has nearly 80% of its stock filled with gas, so what is We see it as a slight adjustment in the situation against that background coupled with lower liquidity on Friday afternoon into a weekend,” Hill said.

According to preliminary data, the S&P 500 . index (.SPX) It lost 41.23 points, or 1.06%, to close at 3,925.62 points, while the Nasdaq Composite lost. (nineteenth) It lost 154.12 points, equivalent to 1.31%, to 11631.01 points. Dow Jones Industrial Average (.DJI) It fell 327.23 points, or 1.03%, to 31,329.19 points.

Markets are closed on Mondays due to the Labor Day holiday.

energy (.SPNY) Standard & Poor’s was the only major sector to end the session in positive territory.

While payrolls beat expectations, 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 efforts to raise initial interest rates were under way. I started. take effect. 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.

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Fears of violent policy tightening sent stocks lower after hitting a four-month high in mid-August, with the S&P 500 index (.SPX) It’s down 4% since Fed Chair Jerome Powell’s hawkish comments last week about raising interest rates. His views were later echoed by other policymakers.

All three major indices suffered their third consecutive weekly loss.

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(Reporting by Chuck Mikolajchak) Editing by Jonathan Otis

Our criteria: Thomson Reuters Trust Principles.

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