Dow slips 100 points as tensions with N.Korea escalate

Marco Green
August 13, 2017

NORTH KOREA: President Donald Trump warned North Korea of "fire and fury" this week 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.

Top military brass and President Trump are being sued by five USA military members that want to keep Trump's transgender ban from becoming a reality - "in any capacity".

The tech-heavy Nasdaq composite bore the brunt of the sell-off, losing 135.46 points, or 2.1 percent, to 6,216.87.

U.S. stocks also fell, lingering in negative territory the entire session, but notching smaller declines than in overseas markets.

The S&P 500 volatility index jumped again on the latest jawboning in the US-North Korea standoff. A batch of disappointing earnings results from big retail chains and simmering tensions between the US and North Korea weighed on the market.

Meanwhile, the Russell 2000 index of small-cap stocks looked poised for a weekly drop of almost 3%, its biggest one-week decline since February 2016.

FINANCIALS FALLING: Several financial sector companies also helped pull down the market. The Stoxx Europe 600 fell 1%, while benchmarks in Hong Kong and South Korea - which had been one of the best performers of 2017 - closed down 2% and 1.7% respectively, Friday, putting the week's drop at 2.5% and 3.2%.

RETAIL SLUMP: Disappointing quarterly results from big department store chains put investors in a selling mood.

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. Dillard's slumped 17.8 percent after the chain booked a loss for the second quarter as increased inventory led to big discounts. Macy's sank 10.3 percent and Kohl's lost 5.8 percent.

Dow member Disney dropped 3.9 percent as it reported flat third-quarter revenues due in part to weakness in its cable subscription business.

ENERGY: Benchmark U.S. crude gained 28 cents to $49.84 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price worldwide oils, slid 52 cents, or 1 percent, to $52.18. The stock fell $1.07 to $5.17. Economists had expected prices to rise by 0.2 percent. The yield on the 10-year Treasury note slipped to 2.21 percent from 2.25 percent late Wednesday. The consumer discretionary index plunged 0.47%. Copper fell 2 cents to $2.90 a pound. The major index futures are now pointing to a modestly higher open for the markets, with the Dow futures up by 21 points. Altice USA, the subsidiary of the French company, added 0.1 percent. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman all rose and the Dow Jones US defense index was up 1.6% after hitting a record high.

Other reports by Click Lancashire

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