US markets close weak amid US-North Korea tensions

Randall Padilla
August 14, 2017

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. Health care companies were among the gainers.

USA stocks were lower yesterday as investors rushed to safe-haven assets after President Donald Trump's "fire and fury" warning to North Korea escalated tensions with the nuclear-armed nation.

The Wells Fargo Investment Institute describes the market response, so far, as "tepid". The Dow Jones industrial average fell 36.64 points to close at 22,048.70, with Walt Disney contributing the most losses. Earlier, the average had been down more than 88 points. Nasdaq-100 futures slid 23 points, or 0.4%, to 5,895. In Europe, the Stoxx 600 index has fallen 1.2 percent for the week. Nine of the index's 10 main groups ended lower.

U.S. markets ended lower on Wednesday amid rising tensions between United States and North Korea. Pyongyang said it was examining plans for attacking Guam, a US territory in the Pacific that has a USA military base. Secretary of State Rex Tillerson later insisted the US isn't signalling it's about to mete out a military response despite threats from North Korea suggesting it could attack Guam, a USA island territory in the Pacific. But the moves were modest.

The December gold contract was up US$12.40 to US$1,285.40 an ounce.

THE QUOTE: While the tough talk about the potential for war is scary, investors have heard it many times before.

Almost $1 trillion has been wiped out from global equity markets since tensions were sparked off by Trump's "fire and fury" comments on Tuesday.

Priceline sank 6.9 per cent as it projected third-quarter earnings below analyst expectations.

Separate ONS data showed that a pick-up in Britain's industrial output in June was marred by a slump in auto production, while construction output also fell. Netflix lost 1.5 per cent.

Fossil tumbled 25.1 percent after the watch maker said sales continued to weaken, falling short of analysts' estimates. The company booked a hefty charge and said its CFO is leaving the company. The stock lost $2.97 to $8.87. Autodesk (ADSK) and Red Hat (RHT) posted notable gains. Regeneron Pharmaceuticals led the pack, adding $4.47, or 1 percent, to $474.15.

The geopolitical turmoil appeared to have more of an impact overnight and into early Wednesday.

Six of the 11 major S&P sectors were higher, with the technology's .SPLRCT 0.36 percent rise leading the advancers.

Among other markets, oil prices advanced after a US Department of Energy report showed lower oil inventories. Hong Kong's Hang Seng was off 0.3 percent. Brent crude, used to price worldwide oils, gained 56 cents to $52.70 in London. The September copper contract was down two cents to US$2.91 a pound.

Titled "Reckless game over the Korean Peninsula runs risk of real war", the editorial suggested China will stay neutral if North Korea strikes first, but will intervene if the the first mover. The euro edged down to $1.1726 from $1.1751.

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