By Geoffrey Smith
Investing.com -- U.S. stock markets were lower again in early trading on Friday as fears of tighter sanctions on Russia - and the consequent disruption of global energy and food markets - outweighed a broadly positive jobs report for February.
Commodity prices are set for their biggest weekly gain since the 1960s as prices for everything from crude oil and natural gas to wheat, aluminum and nickel have skyrocketed in response to growing expectations that the West will close the current loophole in its sanctions packages.
Calls for a tightening of sanctions have multiplied as Russia's attacks on Ukrainian cities have intensified this week. They grew louder still after Russian shelling caused a fire at Europe's largest nuclear power plant late on Thursday. The plant has now been captured and the blaze - which never seriously threatened the plant's reactor buildings - has been brought under control.
By 10:10 AM ET (1510 GMT), the Dow Jones Industrial Average was down 485 points, or 1.4% at 33,309 points. The S&P 500 was down 1.5% and the Nasdaq Composite was down 1.6%.
Higher global energy and food prices, if sustained, typically lead to sharp slowdowns in global growth, which would hurt multinational U.S. companies disproportionately. The domestic economy, however, still appears to be in robust health, having added 678,000 nonfarm jobs in February, far more than the 400,000 expected. The unemployment rate fell to 3.8%, its lowest since the start of the pandemic, while higher wages appeared to be drawing more workers back into the labor force: The participation rate rose to 62.3%.
There were also signs that inflationary pressures emanating from the labor market may be subsiding a little, a trend that, if confirmed, would reduce the need for aggressive monetary policy tightening later this year. Average hourly earnings growth slowed to 5.1% on the year from a downwardly revised 5.5%.
Among early movers, Tesla (NASDAQ:TSLA) stock stood out from the crowd with a rise of 0.6% after winning conditional approval to start production at its new factory outside Berlin in Germany. Oil and gas stocks also stood out as crude prices roared higher in response to the announcement of fresh sanctions on the Russian refining sector. Occidental Petroleum (NYSE:OXY) stock rose 7.0%, while Exxon Mobil (NYSE:XOM) stock rose 1.4% and Chevron (NYSE:CVX) stock rose 2.1%.
Broadcom (NASDAQ:AVGO) stock also stood out with a 2.4% rise after well-received earnings on Thursday, but the majority of moves were downward. Airline stocks fared particularly badly, with United Airlines (NASDAQ:UAL) stock falling over 7% and American Airlines (NASDAQ:AAL) falling 5.4% on a combination of fears about higher fuel costs and disruptions to long-haul services from the closure of Russian airspace.
Microsoft (NASDAQ:MSFT) stock fell 2.0%, as the software giant announced that it would halt all new sales in Russia, joining a growing list of essential Western suppliers of goods and services to limit their activities in the country. Elsewhere, Costco (NASDAQ:COST) stock fell 3.6%, although its disappointing guidance, which warned of product shortages and rising input costs, was made to seem less exceptional by the broader market move.