Wall Street lower as investors weigh rising North Korea tensions

Gladys Abbott
August 11, 2017

Wall Street clawed back losses but closed slightly lower on Wednesday amid earnings disappointments by Walt Disney and other big companies and as investors appeared to brush off North Korea concerns. U.S. President Donald Trump said on Thursday afternoon that his earlier warnings to North Korea may not have been tough enough.

The VIX, a measure of how much volatility investors expect in stocks, jumped 10.4 percent.

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.

US equity indexes opened lower in response to comments from the previous day.

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The escalating tensions prompted investors to dump assets seen as riskier, such as stocks and high yielding currencies, and flock to traditional safe haven assets like the yen, Swiss franc and gold. Only utilities sector stocks eked out a gain on a day of mostly listless trading as investors kept an eye on the latest company earnings and geopolitical news. However, any signs that the U.S.is preparing for an attack on North Korea and/or the actual launching of missiles by North Korea would likely lead to more significant selling pressure. The S&P hasn't moved more than 0.5 per cent in a day since July and has fallen more than one per cent only twice this year. The Nasdaq Composite dropped 40.64 points, or 0.64 percent, to 6,311.70. Chemical company Brenntag was down 5.21% on disappointing quarterly results.

Disney dropped 4.5 percent after reporting a weak quarter and saying it would pull its movies from Netflix and start its own video streaming services. Travel-review website operator TripAdvisor was down 2.7 per cent. Britain's FTSE 100 added 0.1 percent.

In overseas trading, stock markets across the Asia-Pacific region saw further downside during trading on Thursday. Lockheed Martin LMT.N , Raytheon RTN.N , General Dynamics GD.N and Northrop Grumman NOC.N all rose and the Dow Jones U.S. defense index .DJUSDN was up 1.6 percent after hitting a record high. On the Nasdaq, 1,846 issues fell and 953 advanced favouring decliners.

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