Equities fall on rising tension between US & North Korea

Cornelia Mascio
Agosto 13, 2017

Markets across Asia suffered a bloodbath on Friday (Aug 11) as investors bailed on fears that escalating tensions between the United States and North Korea may boil over into military confrontation.

"North Korea responding with a threat to USA territory after Trump warned them not to threaten the USA was never going to go down well", Lawler said.

A man watches a television screen showing U.S. President Donald Trump, left, and North Korean leader Kim Jong Un during a news program at the Seoul Train Station on Thursday.

Safe havens benefited from the move away from stocks - gold rising again to around $1,279 an ounce after surging 1.3 percent Wednesday - but other risky assets such as oil and copper held their price.

"When you have a market like we have had this year, and it has been amazingly calm, and you introduce a major source of uncertainty, there is bound to be some reaction", said Brad McMillan, chief investment officer for Commonwealth Financial. The S&P has lost more than 1 percent on only three days this year.

The last time the S&P closed down more than 1 percent was May 17 when it fell 1.8 percent.

By mid-morning in NY investors began to look for stocks to buy rather than offload and the Dow Jones industrial average was 38.65 points higher at 21,882.92 while the S&P 500 was...

Frankfurt's DAX 30 was 0.4 per cent lower at 11,961.60 points.

Macy's (M.N) shares closed down 10.2 percent and Kohl's (KSS.N) fell nearly 6 percent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off.

The broad-based S&P 500 shed 0.6 percent to 2,459.50, while the tech-rich Nasdaq Composite Index tumbled 0.8 percent to 6,299.12.

In other news, U.S. wholesale inflation dropped in July, the first contraction in almost a year and another data point that could weaken the case for the Federal Reserve to raise the benchmark interest rate again later this year. Financials fell the most, down about 1 percent.

However, Federal Reserve Bank of New York President William Dudley suggested on Thursday that the central bank was on track to raise interest rates once more as he expects sluggish inflation to rise over the next several months.

J.C. Penney slumped as much as 18.25 percent to a record low after the retailer reported a bigger-than-expected quarterly loss.

Selling was broad. Declining issues outnumbered advancing ones on the NYSE 6-to-1; on Nasdaq, a 3.60-to-1 ratio favored decliners. On the Nasdaq, 1,685 issues fell and 615 advanced favoring decliners.

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