Wall Street lower on US-North Korea tensions

Cornelia Mascio
Agosto 13, 2017

Gold is often seen as a safe haven for investors during uncertain times, such as the heated exchanges between U.S. President Donald Trump and the North Korean regime.

The Dow Jones Industrial Average fell for a third straight session, shedding 205 points Thursday, or 0.9%, to 21844.01 in the blue-chip index's biggest one-day decline since May 17. In the previous session, USA stocks finished in the red.

The benchmark Korea Composite Stock Price Index lost 4.19 points, or 0.18 percent, to 2,364.20 in the first 15 minutes of trading.

By 3.08pm, the FTSE 100 had fallen by 121 points or 1.6% and was on track for its worst day since April, also pressured by losses in the commodity sector and disappointing British export figures.

The Nasdaq Composite number was down 16.88 points, or 0.26 per cent, at 6,353.58.

On Tuesday, President Donald Trump warned North Korea of "fire and fury" in response to recent threats from Pyongyang, which said it was examining plans for attacking Guam, a USA territory in the Pacific with a military base. North Korea responded by saying it was "carefully examining" the idea of a missile strike on Guam, a U.S. Pacific territory.

The benchmark US yield on Thursday was just above 2.2 percent, at its lowest level since late June, as investors bought up Treasuries, a classic safe harbor. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman all rose, with the Dow Jones US defense index up 1.48 percent at 409.58.

Markets have been lifted from a state of inertia as geopolitical tensions have ramped up following the United Nations' decision to impose sanctions against North Korea's rapidly developing nuclear weapons program, leading to the latest war of words between the countries. The Russell 2000 index of smaller-company stocks ticked up 0.2% to 1,416.

Michael Kors Holdings Ltd. climbed 21.5 percent after the luxury handbag and apparel designer and retailer's latest quarterly results beat analysts' forecasts as sales improved. The stock lost $4.15 to $102.83.

Investors reacted by driving up the price of gold and bonds, traditional safe-haven plays. "I think before the end of the year the market goes to new highs and (Treasury) yields go higher".

MARKETS OVERSEAS: In Europe, Germany's DAX fell 1.1 percent, while France's CAC 40 slid 1.4 percent.

On the currency markets, sterling rose 0.2% to flit around the 1.30 USA dollar mark, with the greenback falling in response to the latest U.S. inflation data. Major indexes in Asia closed lower.

Ralph Lauren Corp. shares gained $10.38, or 13.3 percent, to $88.53, while peer-to-peer loan company LendingClub Corp. added 99 cents, or 18.1 percent, to $6.45.

Manulife Financial Corp was down 1.1 percent to C$25.64.

September-dated crude futures settled up 0.8%, or 39 cents, at $49.56 per barrel.

CURRENCIES: The dollar rose to 109.24 yen from 109.20 while the euro weakened to $1.1756 from $1.1773.

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