Wall Street is leaded by North Korea and disrupted by Irma

Marco Green
September 7, 2017

South Korean warships conducted live-fire exercises at sea following USA warnings of a "massive military response" after North Korea's biggest nuclear test to date.

Tension between the US and North Korea has been escalating recently.

United States financial markets were closed for the Labour Day holiday on Monday.

"North Korea seems to be what gets the biggest reaction, at least over the last month or two", said Aaron Jett, vice president for global equity research at Bel Air Investment Advisors in Los Angeles.

"It's basically just a risk-off day", Jett noted.

At 12:41 p.m. ET (1641 GMT), the Dow Jones Industrial Average was down 239.61 points, or 1.09 percent, at 21,747.95 and the S&P 500 was down 24.8 points, or 1 percent, at 2,451.75. "There is no data, no earnings, nothing really fundamental to move the market today, so it sells off when there's a scary headline again", Mr Jett said. This September could be particularly nail-biting as Wall Street may face a rough ride if there is a showdown in Washington over the U.S. budget and the federal debt ceiling.

Shares in home insurers with exposure to Florida tumbled as investors braced for losses as Hurricane Irma appeared set to hit the state.

Wall Street climbed on Wednesday, boosted by energy shares and helped by news of an agreement to extend the debt limit, as stocks bounced back from a day-earlier selloff. Ten-year Treasury yields were flat at 2.07 percent, having fallen as far as 2.065 percent on Tuesday. Tokyo's benchmark Nikkei 225 index lost 0.93 percent, or 183.22 points, to close at 19,508.25, ending three days of gains, while the Topix index of all first-section issues fell 0.99 percent, or 16.04 points, to 1,603.55.

Mitsubishi UFJ fell 1.16 percent to 667.7 yen and rival Sumitomo Mitsui was down 1.09 percent at 4,075 yen.

Bank shares saw some of the biggest falls on the Dow, with Goldman Sachs down 2.1% and JP Morgan Chase slipping 1.4%.

Fed Governor Lael Brainard said on Tuesday the central bank should be cautious about tightening policy further until it was clear inflation was heading towards target.

S&P500 mini futures maintained small losses following Pyongyang's nuclear test and last stood at 2,469, 0.2 percent below their official close on Friday.

Travel companies including United Airlines and Expedia fell.

Insmed shares more than doubled after the company said its drug for the treatment of a rare and serious lung disorder met the main goal in a late-stage study. Sydney's S&P-ASX 200 was unchanged at 5,697.50 while New Zealand, Bangkok and Jakarta declined.

Other reports by Click Lancashire

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