Markets slide for third day on political tension

Gladys Abbott
August 13, 2017

United States 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.

Falls were also seen on Wall Street, with the Dow Jones Industrial Average down 0.5% about 15 minutes into trading and the Nasdaq tumbling by 0.6%.

Declines in US stocks accelerated Thursday, a pullback that many investors and analysts said had been overdue with indexes at highs and volatility near record lows.

The Standard & Poor's 500 index fell 35 points, or 1.4 percent, to 2,438, its biggest drop since mid-May.

Dow e-minis were up 6 points, or 0.03 percent, with 29,187 contracts changing hands at 8:34 a.m. ET (1234 GMT).

On Thursday, in response to North Korea's threat to fire missiles at American targets in the Pacific, President Trump said that if Pyongyang "does something in Guam, it will be an event the likes of which nobody has seen before - what will happen in North Korea". The yield on the 10-year Treasury note fell to 2.22 percent from 2.26 percent late Tuesday. December-dated gold futures finished the day up 1.3%, or $16.70 at $1,279.30 per ounce.

But U.S. stocks regained some lost ground, despite Trump's comments Friday that U.S. weapons are "locked and loaded", ready to respond if North Korea acts "unwisely". Twenty-First Century Fox gave up 46 cents, or 1.6 percent, to $27.57.

LOOKING GOOD: Michael Kors climbed 21.9% to $45.40 after the luxury handbag and apparel designer and retailer posted quarterly results that beat analysts' forecasts as sales improved.

Shares of Walt Disney were down 4.23 per cent, the biggest drag on Dow, as investors doubted whether the company can succeed with its plan to launch its own streaming services rather than rely on Netflix to reach online viewers.

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Travel and media companies led USA stocks lower in afternoon trading Wednesday as some rare earnings disappointments weighed on the market.

The rouble, however, withstood the pressure thanks to global demand for Russia's still high-yielding bonds as well as monthly tax payments due from next week.

The market indexes wavered between small gains and losses for much of the morning, then veered lower by afternoon.

Offsetting the declines was a 0.4 percent gain by the materials group, which includes gold producers.

Housebuilders Persimmon, Taylor Wimpey and Barratt fell by 2.8 to 3% on weak house price data. Sony Corp. shares in Tokyo dropped 1.6 percent. Hong Kong's Hang Seng added 0.6%.

MARKETS OVERSEAS: In Europe, Germany's DAX fell 1.1 percent, while France's CAC 40 slid 1.4 percent. Copper fell 2 cents to $2.93 a pound.

The September crude contract was up 20 cents to US$49.76 per barrel and the September natural gas contract was up seven cents to US$2.95 per mmBTU. Brent crude, the global standard, lost 23 cents to $52.14 a barrel in London.

CURRENCIES: The dollar rose to 109.24 yen from 109.20 while the euro weakened to $1.1756 from $1.1773.

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