Stock Market Today: Dow Extends Weekly Slump as Europe Energy Concerns Dent Stocks
2022.09.03 02:25
By Yasin Ebrahim
Investing.com — The Dow fell to its third weekly loss Friday, as fresh worries of an energy crisis in Europe on global growth offset data pointing to a stronger-than-expected U.S. labor market.
The Dow Jones Industrial Average slipped 1.1%, or 337 points, the Nasdaq was down 1.3%, and the S&P 500 fell 1%.
Russia’s state-controlled energy firm Gazprom said it won’t be able to resume gas flows through the Nord Stream pipeline, a main supply route to Europe, by a Saturday deadline, citing a fault during maintenance. The energy firm didn’t provide details on a new timeline, raising the prospect of an energy crisis in Europe that many fear will lead to a deep recession on the continent and derail global growth.
U.S. stocks gave up their early-day gains, which followed data showing that the U.S. economy created more jobs than expected and wage pressures slowed as more people entered the labor market.
August payrolls were 315,000, ahead of expectations for 300,000, while the participation rate “jumped 0.3% to 62.4%, the highest level since March, matching the COVID-era high,” Jefferies said.
The jobs data, however, isn’t expected to weigh heavily on the Federal Reserve’s rate hike decision due later this month as investors look ahead to an inflation report later this month.
“The prospect of a 75-basis point increase was cemented by Fed chair Jerome Powell’s speech [at Jackson Hole], and the report this morning hasn’t really changed that stance at all,” Johan Grahn, head of ETF Strategy at Allianz told Investing.com on Friday.
But even if the inflation report comes in cooler than expected, Grahn believes it may still be “too early for the Fed to start wavering in their communication and turn dovish as they’re still nowhere near where there are, what they’re aiming for.”
Treasury yields eased from the session highs, but that did little to boost growth areas of the market such as tech.
Meta Platforms (NASDAQ:META) slipped 3% to lead big tech lower, with Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) down more than 1%.
Chip stocks also slid into the red, though losses were kept in check by a climb in Broadcom (NASDAQ:AVGO).
The chipmaker delivered upbeat guidance after reporting quarterly results that topped Wall Street estimates on both the top and bottom lines, led by strength in its semiconductor business.
Sentiment on chipmakers has been soured by deteriorating global growth that is expected to hit demand, but Broadcom could weather the storm “better than most due to a consistent scrubbing of backlog…long lead-times on non-cancellable orders, and heavy infrastructure exposure,” Deutsch Bank said in a note.
Lululemon Athletica (NASDAQ:LULU), meanwhile, jumped more than 6% and delivered an upbeat outlook, forecasting strong sales to continue even as inflation continues to put the squeeze on consumers. The athletic leisure wear company also reported quarterly results that topped analysts’ estimates.
In other news, Beyond Meat (NASDAQ:BYND) fell 4% after Baillie Gifford cut its stake in the plant-based food producer to a 6.61% stake from a 13.38% stake previously reported last year.
