Stocks, dollar extend slide as US, North Korea tensions intensify

Marco Green
August 13, 2017

Financial markets have tended to quickly shake off North Korea's periodic saber-rattling in the past, dismissing it as bluster, but tensions have lingered this year amid signs that it is making progress in its ballistic missile program and on Trump's growing frustration with Pyongyang.

Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute, attributed this week's downturn in the major indices mainly to economic indicators rather than geopolitical brinkmanship.

Escalating tensions over North Korea's nuclear ambitions rattled investors Thursday, helping to pull global share benchmarks lower.

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 us territory in the Pacific with a military base.

U.S. President Donald Trump issued a new verbal warning to Pyongyang on Thursday, saying that his previous promise to unleash "fire and fury" may not have been strong enough after North Korea responded with a threat to land a missile near the U.S. Pacific territory of Guam.

A notable decline by Disney (DIS) is likely to help drag the Dow lower, with the entertainment giant under pressure in pre-market trading.

About 6.15 billion shares changed hands on US exchanges, below the 6.29 billion average for the last 20 sessions.

The pan-European FTSEurofirst 300 index lost 1.19%.

The report said labor productivity climbed by 0.9 percent in the second quarter after inching up by a revised 0.1 percent in the first quarter.

The Labor Department also said unit labor costs rose by 0.6 percent in the second quarter following an upwardly revised 5.4 percent spike in the first quarter. Come the United Kingdom trading session and a continued sell-off was seen, taking the pair to an eight week low.

Shares of Snap (SNAP.N) ended down 14 percent after hitting a record low following a miss on revenue and daily active users. Wall Street was poised for further losses at the opening bell, with Dow futures and the broader S&P 500 futures down 0.3 percent.

The latest sell-off was the most severe yet, amounting to the biggest single-day drop for the stock market in almost three months.

In Europe, Germany's DAX fell 1.1 percent, while the CAC 40 in France lost 0.6 percent.

The major European markets have also shown notable moves to the downside on the day. It added 39 cents to $49.56 a barrel on Wednesday.

The market's backstop safety asset, gold, edged up to its latest two-month high of $1,288 an ounce.

At 5 p.m., the dollar stood at ¥109.81-82, down from ¥110.57-58 at the same time Tuesday.

"A combination of softer euro zone economic data, solid US reports and market positioning all resulted in a markedly heavier tone for the single currency", Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said in a note.

Other reports by Click Lancashire

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