Dow loses more than 100 points amid North Korea tensions

Marco Green
August 13, 2017

President Donald Trump told North Korea on Friday that the USA military was "locked and loaded", while Pyongyang accused him of driving the Korean peninsula to the brink of nuclear war.

Aug 11 (Reuters) - U.S. stocks were modestly higher in late morning trading on Friday as investors cautiously dipped back into riskier assets, after a three-day losing streak on concerns over escalating tensions between the United States and North Korea. While the Nasdaq climbed 39.68 points or 0.6 percent to 6,256.56, the Dow inched up 14.31 points or 0.1 percent to 21,858.32 and the S&P 500 edged up 3.11 points or 0.1 percent to 2,441.32.

On the U.S. economic front, a report released by the Labor Department showed a modest uptick in consumer prices in the United States in the month of July. The Dow slumped by 1.1 percent, while the Nasdaq and the S&P 500 tumbled by 1.5 percent and 1.4 percent, respectively. The major index futures are now pointing to a modestly higher open for the markets, with the Dow futures up by 21 points. The u.s. central bank, one of whose tasks is to contain the price rise, does not therefore appear to be obliged to accelerate the pace of the slow tightening of monetary that it has committed.

Weaker-than-expected July consumer price data pointed to benign inflation that could cause the Federal Reserve to hold off from raising rates again this year.

The stage was set for the USA indexes to go lower early Wednesday as investors around the world reacted to the rising war of words between the US and North Korea, pushing global market indexes lower.

The NASDAQ Composite Index and Dow reversed their direction after President Trump's comments on North Korea.

But are investors really nervous about a possible military conflict with Kim Jong Un? While the German DAX Index has edged down by 0.1%, the French CAC 40 Index and the UK's FTSE 100 Index are both down by 1%. Gold rose as much as 1.2 per cent to a near two-month high, while the Swiss franc was on track to post its biggest single day rise in about two-and-a-half years.

Data storage company Seagate Technology (STX) posted a standout gain within the hardware sector, jumping by 2.4 percent. The Russell 2000 index of smaller-company stocks gave up 4.02 points, or 0.3 percent, to 1,410.15.

BAD TRIPS: Priceline Group slid 8.1 percent after the online travel booking service issued a profit forecast that was weaker than analysts were expecting. Especially, after the fall of the previous day, he felt that the market was too lowered, and he therefore took advantage of a technical rebound. The stock fell 85 cents to $12.76.

The major European markets are also extending a recent move to the downside.

The December gold contract was ahead US$16.70 to US$1,279.30 an ounce.

Developments regarding the situation with North Korea may remain in focus next week, although traders are also likely to keep an eye on reports on retail sales, housing starts, and industrial production.

Investors opted for the perceived safety of US Treasuries, which pushed the yield on the 10-year note three basis points lower to 2.21%.

Disappointing quarterly results from big department store chains also weighed down the market.

Other reports by Click Lancashire

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