US stocks fall after Gazprom shutdown announcement

by Pakistan News
0 comment 0 views


NEW YORK: After following European equities higher Friday, Wall Street stocks reversed course, finishing sharply lower after Russia kept shut a key gas pipeline to Germany.

US stocks had initially gained following August jobs data that showed employment growth moderating and unemployment ticking higher in a report seen by investors as lessening pressure on the Federal Reserve to increase interest rates.

But markets did a 180-degree turn midday as worries increased about the winter ahead after Russian gas giant Gazprom moved to keep natural gas deliveries to Germany off-line.

In a statement, Gazprom indicated it had discovered “oil leaks” in a turbine during a planned three-day maintenance operation, a statement that was seen skeptically in light of international condemnation of Russia’s invasion of Ukraine.

The announcement by Gazprom came the same day as the G7 nations said they would work to quickly implement a price cap on Russian oil exports, a move which would starve the Kremlin of critical revenue for its war effort.

Fear of shortages of natural gas has driven futures contracts for electricity in France and Germany to record levels.

“You can draw a line to that Gazprom news,” said Briefing.com analyst Patrick O’Hare. “We’re going to continue to be stuck with this energy crisis hitting Europe and the prospect of a recession there.”

After opening higher, the broad-based S&P 500 finished at 3,924.35, down 1.1% for the day and 3.3% for the week.

The Gazprom announcement came after European bourses had already closed, with London, Paris and Frankfurt all posting solid gains following the US jobs data.

Labor Department data showed US employment increased by 315,000 jobs last month, which was in line with what economists were expecting but at a much slower pace than the 526,000 hires in July.

Markets have been expecting a third 0.75-percentage-point hike later this month. While the August jobs growth remained solid, unemployment rose to 3.7% from 3.5%.

“This is a goldilocks scenario for traders who now know that the Fed is unlikely to increase the rate aggressively,” said Naeem Aslam, chief market analyst at Avatrade.

“This factor has pushed the dollar index lower and gold prices moved higher on the back of this,” he added.

The dollar had rallied this week to highs not seen for decades including against the pound, euro and yen on expectations that the Fed would continue to raise interest rates aggressively.

The yen hit a new 24-year low against the dollar on Friday.

 Key figures at around 2020 GMT 

New York – Dow: DOWN 1.1% at 31,318.58 (close)

New York – S&P 500: DOWN 1.1% at 3,924.35 (close)

New York – Nasdaq: DOWN 1.3% at 11,630.86 (close)

London – FTSE 100: UP 1.9% at 7,281.19 (close)

Frankfurt – DAX: UP 3.3% at 13,050.27 (close)

Paris – CAC 40: UP 2.2% at 6,167.51 (close)

EURO STOXX 50: UP 2.5% at 3,544.38 (close)

Tokyo – Nikkei 225: FLAT at 27,650.84 (close)

Hong Kong – Hang Seng Index: DOWN 0.7% at 19,452.09 (close)

Shanghai – Composite: UP 0.1% at 3,186.48 (close)

Dollar/yen: UP at 140.16 yen from 139.44 yen on Thursday

Euro/dollar: UP at $.9957 from $0.9946

Pound/dollar: DOWN at $1.1515 from $1.1545

Euro/pound: UP at 86.45 pence from 86.14 pence

West Texas Intermediate: UP 0.3% at $86.87 per barrel

Brent North Sea crude: UP 0.7% at $93.02 per barrel

You may also like

Pakistan Live News
Pakistan’s Most Trusted, Source of News. Pakistan Live News is Pakistan’s most trusted website for breaking news and key developments.


Latest News

@2022 – Pakistan Live News – All Right Reserved.