TSX hits 1-month low on risk aversion, lower oil prices

Gladys Abbott
August 13, 2017

Technology companies led a broad slide in USA stocks Thursday afternoon, putting the market on track for its biggest loss in two months.

Shares in several other big media companies also declined. "Although it is considered highly unlikely that this tension will escalate into a nuclear war, the market still needs to see how President Trump will eventually deal with his advocating "fire and fury" against North Korea's threat", said Margaret Yang Yan, market analyst at CMC Markets Singapore. Oil prices veered lower as early gains faded.

The Standard & Poor's 500 index dropped 35.81 points, or 1.4 percent, to 2,438.21.

The Dow Jones Industrial Average fell 0.9 percent to end at 21,844.01, the only close below 22,000 since breaking through that level for the first time August 2. Japan and South Korea vowed a strong reaction if the North were to go through with the plan.

USA stocks rose on Friday as Wall Street clawed back from a sharp decline in the previous session, though geopolitical uncertainty continued to be the focus for investors, contributing to weekly declines.

U.S. stocks deepened their losses following the latest Trump comments, and the S&P 500 volatility index, known unofficially as the "fear index", rose decisively.

Grant Williamson, director at Hamilton Hindin Greene, said today's selling was based on the offshore leads, but is also an excuse for investors to take profits from the market which has been hitting record highs.

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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. Bank of New York Mellon fell $1.56, or 2.9 percent, to $52.48, while Citizens Financial Group slid 86 cents, or 2.5 percent, to $34.17.

Shares of Kohl's were down 8.4 percent, while Macy's fell 4 percent after the department store operators reported a fall in sales. The stock lost $2.36, to $20.67. Kohl's Corp. also declined, giving up $2.43, or 5.8 percent, to $39.50.

UNDERCOOKED: Blue Apron slumped 17.1 percent after the meal kit seller reported a sequential decline in customers in the second quarter due to a planned reduction in marketing. On the Nasdaq, 1,685 issues fell and 615 advanced favoring decliners. The u.s. central bank, one of whose tasks is to contain the price rise, does not therefore appear to be obliged to accelerate the pace of the slow tightening of monetary that it has committed.

OIL: Benchmark U.S. crude gained 13 cents to $49.69 a barrel on the New York Mercantile Exchange. Brent crude, used to price global oils, slid 52 cents, or 1 percent, to $52.18. Germany's DAX fell 0.9 percent, while the CAC 40 in France lost 0.5 percent. Australia's S&P/ASX 200 edged down almost 0.1 per cent to 5,760.90, while South Korea's Kospi fell 0.5 per cent to 2,357.84.

CURRENCIES: The dollar slipped to 109.31 yen from 109.85 late Wednesday.

MARKETS OVERSEAS: Major indexes in Europe were headed lower. The Russell 2000 index gave up 24.40 points, or 1.7 percent, to 1,372.54. Earlier in Asia, Japan's benchmark Nikkei 225 slipped less than 0.1 percent, while Hong Kong's Hang Seng slid 1.1 percent.

Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in July, matching the increases seen in the three previous months.

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