Korean shares extend losses amid escalating tensions over N. Korea

Gladys Abbott
August 13, 2017

But Wall Street is wondering whether the sell-off is due to North Korea - or just a widely anticipated pullback?

"Military solutions are now fully in place, locked and loaded, should North Korea act unwisely". Trump took specific aim at North Korean leader Kim Jong Un, saying, he had "disrespected our country greatly", and would not be "getting away with it".

Trucking and software stocks are also seeing notable strength in mid-day trading, while steel stocks have moved sharply lower on the day.

And with that, the S&P 500's steak of 58 days without a 1% move in either direction came to an end. The Dow slumped 204.69 points or 0.9% to 21,844.01, the Nasdaq plummeted 135.46 points or 2.1% to 6,216.87 and the S&P 500 tumbled 35.81 points or 1.5% to 2,438.21.

The MSCI World index dropped 1.1% overnight in its third straight day of declines and its biggest one-day slide since May 17, as US President Donald Trump stepped up his rhetoric against North Korea.

North Korea claimed "only absolute force" can work on someone as "bereft of reason" as Trump and detailed plans to fire a salvo of missiles into waters around the US Pacific territory of Guam.

"If anything, maybe that statement wasn't tough enough", Trump said to a pool of reporters Thursday.

"If the market truly believed the North Korea reaction was imminent, I think it would be down a lot more than it is", said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

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The focus on North Korea largely overshadowed a Labor Department report showing an unexpected drop in United States producer prices in the month of July.

The Labor Department said on Friday its Consumer Price Index edged up 0.1 percent in July, which was below the 0.2 percent rise expected by economists polled by Reuters. The NYSE Arca Biotechnology Index plunged by 3.4% to its lowest closing level in well over a month. The second-largest decline came from Angola, whose production fell by 19,300 bpd, and Venezuela's output dropped by 15,800 bpd.

In commodities, Crude failed to hold the 50 per barrel level, falling almost 2% topping at $50.22 earlier in the session. Meanwhile, after jumping $10.80 to $1,290.10 an ounce in the previous session, gold futures are climbing $6.50 to $1,296.60 an ounce.

The local currency was trading at 1,147.55 won against the USA dollar, down 5.55 won from the previous session's close. Against the euro, the dollar is valued at $1.826 compared to yesterday's $1.1772. The Japanese market was closed in observance of the Mountain Day holiday. "Because things will happen to them like they never thought possible". The index - which last week hit 22,000 for the first time - closed at 21,844.

An hour after trading opened this morning, the S&P/NZX50 index was down 79.2 points, or 1 per cent, to 7,710.51.

Australian shares fell to near three-week lows in a broad-based selloff.

On average, the S&P 500 falls 5% or more every 10 weeks and the index falls 10% every 33 weeks, according to data analyzed by AllianceBernstein going back to 1928. On the Nasdaq, 1,378 issues rose and 892 fell.

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