Nasdaq, S&P 500 Reverse Earlier Gains As European Energy Crisis Looms Large

Fresh worries over the Nord Stream pipeline surfaced during the early portion of the U.S. session.

As a result, stocks gave back early morning gains.

Russian energy giant Gazprom was originally scheduled to resume natural gas flow through the pipeline that connects Russia to Germany on Sept. 3. However, the company announced Friday that it will postpone the resumption, claiming that — while inspecting a compressor station — leaks were discovered.

Gazprom did not provide an estimated time for resuming.

The only sectors still in the green are energy and materials, with the tech-heavy communications services sector driving indices lower.

The action follows the release of a so-called "Goldilocks" jobs report (not too hot, not too cold). The U.S added a modest 315,000 jobs last month, surpassing the economist expectations of 298,000 jobs. The U.S. unemployment rate was 3.7% according to data from the Bureau of Labor Statistics, missing the 3.5% level economists had predicted.
See Also: US Adds 315K Jobs In August, Clearing The Path For Another Aggressive Interest Rate Hike

Prior to fears about the European gas supplies resurfacing, all sectors momentarily saw positive performance. Short-term traders are unlikely to want to retain positions during the extended break amid geopolitical instability because of this and the fact that U.S. equities markets will be closing for the extended Labor Day holiday weekend.

With the latest moves, the Dow Jones, Nasdaq and S&P 500 are poised to close lower for the 4th straight week.

What's Moving

• Lululemon Athletica Inc. LULU shares are trading higher by 6.49% to $313.52 Friday afternoon after the company reported better-than-expected second-quarter EPS and sales results and issued third-quarter and FY22 EPS and sales guidance above estimates. Lululemon reported second-quarter revenue of $1.9 billion, up 29% year-over-year. Adjusted earnings per share in the second quarter was $2.20, beating Street estimates of $1.86.
• NVIDIA Corporation NVDA shares are extending its losses on Friday by 1.85%, still on the news that the Biden administration is restricting some sales in China and Russia, which could result in $400 million in losses in the third quarter.

Foreign Markets

• China announced on Thursday that it would declare a state of emergency in Chengdu, a prominent southwestern province. Some 21 million residents will shelter in place amid a new COVID-19 outbreak, according to South China Morning Post (SCMP).
• Hong Kong recorded 10,586 coronavirus infections on Thursday, the first time a five-digit number has been recorded in more than five months.
• The Hang Seng Index declined 0.7% to 19,452.09 at the close, the lowest close in a week. The index lost 3.6% for the week. The Hang Seng Tech Index slipped 1.4%, while the Shanghai Composite Index added 0.1%.

See Also: These Stocks Take A Hit As Covid-19 Outbreak Leads To Megacity Lockdown In China

Photo: Maxence / Flickr Creative Commons