Stocks fall ahead of Friday's US jobs data; oil gains on Iran concerns
Market Overview and Economic Impacts
By Caroline Valetkevitch
NEW YORK, Aug 6 (Reuters) - Most major stock indexes eased on Thursday, ahead of Friday's key U.S. jobs report, while oil prices jumped on concerns about U.S. and Israeli access to the Strait of Hormuz.
Iran Strait of Hormuz Tensions
Iran's semi-official Fars news agency reported, citing a lawmaker, that an Iranian parliamentary committee is reviewing a preliminary bill that would bar U.S., Israeli and other "hostile" vessels from transiting the Strait of Hormuz.
The draft bill would impose fines of up to 20% of a ship's cargo value for violations of the proposed restrictions.
Oil Price Reaction
Brent crude futures rose $3.04, or 3.83%, to settle at $82.49 a barrel. U.S. West Texas Intermediate futures gained $2.07, or 2.75%, to $77.29. Higher oil prices are a negative for consumers and the economy.
"There's a distaste for risk assets in the air," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "You see higher oil and higher interest rates."
Stock Market Movements
All three of the major U.S. stock indexes ended lower, while a global stock index also was down.
Labor Market Data
U.S. data showed that the number of Americans filing claims for unemployment benefits increased slightly last week, while layoffs dropped to a two-year low in July, consistent with a stable labor market.
But investors are bracing for the Labor Department's employment report for July, scheduled for release on Friday.
Many economists and traders are still expecting the U.S. central bank to raise interest rates next month unless inflation improves.
Major Index Performance
The Dow Jones Industrial Average fell 464.02 points, or 0.85%, to 53,885.10, the S&P 500 fell 13.59 points, or 0.18%, to 7,709.96 and the Nasdaq Composite fell 15.09 points, or 0.06%, to 26,348.35.
MSCI's gauge of stocks across the globe fell 3.81 points, or 0.33%, to 1,145.73. The pan-European STOXX 600 index rose 0.16% and hit another record high, driven by media and telecoms stocks.
Yields and Currency Movements
U.S. Treasury Yields
U.S. Treasury yields increased as oil prices rose on concerns about U.S. and Israeli access to the Strait of Hormuz and ahead of Friday's jobs report.
Treasury yields fell earlier this week on optimism that a deal to reopen the strait would keep oil prices in check — a key focus for markets given the risk that higher oil could reignite already-elevated consumer price inflation.
The yield on benchmark U.S. 10-year notes rose 5.67 basis points to 4.674%.
U.S. Dollar and Japanese Yen
The U.S. dollar rose against the Japanese yen, helped by safe-haven positioning.
The dollar was last up 0.44% against the yen at 158.45, for its third straight session of gains after falling to 155.20 on Monday, the lowest level since early May.
The yen had risen after the U.S. and Japanese governments intervened in the market on Friday.
(Reporting by Caroline Valetkevitch in New York; Additional reporting by Elizabeth Howcroft in Paris and Karen Brettell in New York; Editing by Nick Zieminski and Matthew Lewis)
