U.S. stocks tumble on North Korea worries

Javier Stokes
August 13, 2017

Additionally, China weighed in on the standoff, saying in an editorial in state-run Global Times that Beijing will intervene if the US strikes first against North Korea.

The S&P 500 index had its biggest one-day drop in nearly three months on Thursday as investors fled riskier assets, with technology stocks leading the charge, in response to an increasingly aggressive exchange of threats between the United States and North Korea.

The negative headlines provided many investors with an opportunity to pocket some of their recent gains following a string of record highs fueled by strong corporate earnings.

USA economic data did little to distract from the tensions with North Korea, as U.S. labour productivity increased by slightly more than expected in the second quarter.

XAutoplay: On | Off Gold climbed as traders exited stocks and fled to more secure ground, as the back-and-forth saber-rattling between the USA and North Korea escalated.

On Friday, the S&P 500 rose 3.11 points, or 0.1 percent, to 2,441.32.

Raytheon, which manufactures Tomahawk cruise missiles jumped +2.57% while other defense contractors such as Lockheed Martin (+1.71%), Northrop Grumman (+1.22%) and L3 Tech (+1.99%) also saw gains.

The Nasdaq composite lost 13.31 points, or 0.2 percent, to 6,370.46.

The dollar index .DXY , which tracks the greenback against six rival currencies, was down 0.12 percent to 93.53, after rising as high as 93.888 earlier in the session. The stock fell 85 cents to $12.76. The stock is up 54% so far this year.

US President Donald Trump speaks to reporters after a security briefing at his golf estate in Bedminster, New Jersey, US, August 10, 2017.

Trump says North Korea "better get their act together or they are going to be in trouble like few nations have ever been in trouble".

USA stock futures were pointing to a weaker open on Friday.

Dollar slips after United States consumer price data misses expectations
The costs of hotel and motel stays plunged a record 4.9 percent in July, the biggest one-month on records that go back to 1997. The annual inflation rate as measured by consumer prices has been moving down since the winter after climbing above 2 percent.

Nervous investors drove shares lower earlier in the week, after President Trump declared Tuesday that the US would react with "fire and fury" to further nuclear provocations from North Korea. Earlier in the week, Trump said the USA would unleash "fire and fury" on North Korea if it continued to threaten the U.S.

North Korea have since threatened to launch missiles at the US territory of Guam. It's still the highest it's been since May.

The dollar weakened after news that US producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase. -North Korea tensions and the weak data that further reduced expectations of an interest rate hike in December.

Health care equipment and services company Henry Schein declined amid a broader slide by health care stocks. It is poised to end the week down 1.7 percent.

Avis Budget Group slumped 9.9 percent after the auto rental company cut its guidance following a weak second quarter. Consumer-focused companies and banks were among the biggest decliners. The stock lost 78 cents to $3.93. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.3 basis points to 2.189 percent.

USA crude fell 0.41 percent to $48.39 per barrel and Brent was last at $51.68, down 0.42 percent on the day. Altice USA, the subsidiary of the French company, added 0.1 per cent. Rival Advanced Micro Devices was also down 2.6 percent.

The December gold contract was ahead $16.70 United States to US$1,279.30 an ounce. Natural gas gained 2 cents to $2.82 per 1,000 cubic feet. The drop was greater than an expected 2.37 million barrels. It was down 0.2 percent at 108.96 yen, after retreating 0.7 percent on Thursday. The euro fell to $1.1728 from $1.1757.

'Stock markets in Europe are still under pressure because of the heightened tensions surrounding North Korea, ' said David Madden, market analyst at CMC Markets UK.

In European markets, the French CAC 40 was down 0.3% and Frankfurt's DAX 30 shed 0.8%.

The FTSE 100 Index closed down 79.98 points to 7,309.96, with President Donald Trump tweeting that the U.S. military is "locked and loaded" as he warned North Korea over its continuing threats.

In Asia, several indexes closed lower overnight.

Manulife Financial Corp was down 1.1 percent to C$25.64.

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