Stocks plunge over North Korea tensions

Gladys Abbott
August 14, 2017

Spot gold added 0.7 percent to $1,285.70 an ounce.

The CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the USA presidential election on Thursday, but was down 1.22 points at 14.82 points on Friday.

The S&P 500 Index (SPX - 2,474.02) lost 0.9 point, or 0.04%.

Falling crude prices made oil & gas stocks a weight too, dropping 1 percent with Tullow Oil the top faller.

Top military brass and President Trump are being sued by five US military members that want to keep Trump's transgender ban from becoming a reality - "in any capacity".

The North Korea situation isn't the only thing weighing on stocks.

Markets began to tumble Tuesday after President Trump promised North Korea will face "fire and fury like the world has never seen" if the country continues to threaten the US.

The Dow Jones Industrial Average .DJI rose 14.31 points, or 0.07 percent, to end at 21,858.32, the S&P 500 .SPX gained 3.11 points, or 0.13 percent, to 2,441.32 and the Nasdaq Composite .IXIC added 39.68 points, or 0.64 percent, to 6,256.56.

Just hours after US President Donald Trump told North Korea that any threat to the United States would be met with "fire and fury", a spokesman for the Korean People's Army said in a statement carried by the North's state-run KCNA news agency that it was considering a strike aimed at US military bases on Guam.

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Disney shares closed down 3.9 percent as investors were skeptical of its plan to launch streaming services rather than rely on Netflix.

MARKETS OVERSEAS: In Europe, Germany's DAX was down 1.1 percent, while France's CAC 40 fell 1.4 percent.

Meanwhile, the Russell 2000 index of small-cap stocks finished out the week 2.7% lower, its biggest one-week decline since February 2016. South Korea's Kospi fell 0.2 percent.

INFLATION: The Labor Department said consumer prices edged up 0.1 percent in July following no gain in June.

"The geopolitical tensions have prompted a risk off trade amid investors", said Naeem Aslam, chief market analyst at Think Markets UK.

The 30-year bond was last up 4/32 in price to yield 2.7871 per cent, from 2.794 per cent late on Thursday. The yield - or interest rate - on a benchmark 10-year US Treasury bill dropped to 2.24%, while a 10-year German bund was yielding 0.43%.

"Whether it is a credit crunch in China, policy error from the Fed, or fear of an over-valued US stock market, there are many reasons to maintain a balanced multi-asset portfolio that has exposure to defensive asset classes and currencies".

However, bank stocks, including Goldman Sachs, Bank of America and Morgan Stanley, were down about 1 percent on the dimming prospects of another rate hike this year. Brent crude, the worldwide standard, lost 23 cents to $52.14 a barrel in London.

The yen on Friday added to a strong weekly rally against the dollar of close to 1.5 percent, hitting its highest level versus the greenback in nearly four months, at 108.73 yen.

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