© Reuters. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., August 22, 2022. REUTERS/Brendan McDermid
By Devik Jain and Sruthi Shankar
(Reuters) – Wall Street’s main indexes fell in afternoon trading on Friday as investors digested mixed jobs data, while renewed concerns over the European gas crisis prompted investors to sell equities heading into a long weekend.
The main three indexes opened sharply higher following the jobs data that showed stronger-than-expected hiring but an uptick in unemployment rate which eased some fears about aggressive interest rate hikes from the Federal Reserve.
“Investors are rethinking the August jobs report and are probably leaning into the fact that there’s no clear end to the rate increases. Higher rates provide competition for stocks,” said Rick Meckler, partner at Cherry Lane Investments.
Adding to worries, Russia has scrapped a Saturday deadline to resume gas flows via the Nord Stream 1 pipeline, one of the main supply routes to Europe, after saying it discovered a fault during maintenance, deepening Europe’s difficulties in securing fuel for winter.
Russia’s state-controlled oil firm Gazprom (MCX:) said it could not safely restart deliveries until it had fixed an oil leak found in a vital pipeline turbine. It did not give a new timeframe.
“I did see the Gazprom headlines, and obviously that’s not good news,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
Analysts also pointed to thin trading volumes ahead of the extended holiday weekend helping to exaggerate market moves.
“Volume is very light because it is a Friday before a three-day weekend which tends to sometimes give these liquidity vacuums,” Saluzzi added.
Markets are closed on Monday on account of Labor Day.
The CBOE volatility index, also known as Wall Street’s fear gauge, rose to 25.5 points after hitting one-week lows earlier.
Nine of the 11 major S&P sectors were down. All the sectors had risen earlier after the Labor Department’s report showed U.S. employers hired more workers than expected last month.
However, average hourly earnings rose 0.3% compared with estimates of 0.4%, while the unemployment rate edged up to 3.7% from a pre-pandemic low of 3.5%, indicating that the Fed’s efforts to front-load rate hikes were beginning to take effect.
Wage growth data is seen as important to the Fed’s deliberations on increasing interest rates as the central bank looks to bring inflation, running at four-decades high, back to its 2% target.
The focus now shifts to the August consumer price report due mid-month, the last major data available before the Fed’s Sept. 20-21 policy meeting.
Fears of aggressive policy tightening have gripped Wall Street recently, with the sliding nearly 4.5% since Fed Chair Jerome Powell’s hawkish remarks last week about rate hikes. His views were later echoed by other policymakers.
All the three main indexes are set for a third straight weekly loss.
At 1:39 p.m. ET, the was down 186.98 points, or 0.59%, at 31,469.44, the S&P 500 was down 26.50 points, or 0.67%, at 3,940.35, and the was down 113.37 points, or 0.96%, at 11,671.75.
Energy stocks advanced 1.6% as oil prices gained nearly 2% ahead of an OPEC+ meeting to discuss potential production cuts. [O/R]
Advancing issues outnumbered decliners by a 1.08-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.40-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and five new lows, while the Nasdaq recorded 41 new highs and 127 new lows.
Volume on U.S. exchanges was 6.52 billion shares, compared with the 10.31 billion average for the full session over the last 20 trading days.
Image and article originally from www.investing.com. Read the original article here.