Published: Mon, August 14, 2017
Markets | By Noel Gibbs

Stocks slide on continued concern over tension between United States and North Korea

Stocks slide on continued concern over tension between United States and North Korea

By the end of the day almost $1 trillion in equity had been lost globally.

Significant strength was also visible among software stocks, as reflected by the 1.2% gain posted by the Dow Jones Software Index. Utilities companies were down the most.

The latest continues days of escalating rhetorical exchanges between the US and North Korea sparked, in part, by the August 5 unanimous vote in the United Nations Security Council to impose new sanctions on the Kim Jong Un's regime.

The Nasdaq Composite Index plunged 2.1% to 6216.87 and the Standard & Poor's 500 Index dropped 1.45% to 2438.21.

At the close trading in NY, the Dow Jones Industrial Average was down 204.69 points, or 0.9%, to 21,844.01, its biggest one-day fall since May 17. It has weakened 1.9 percent against the dollar this week, making it the worst performer among global emerging-market currencies.

Stocks plunged, while US Treasuries and gold climbed, as US President Donald Trump's latest comments further inflamed tension with North Korea.

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On Tuesday, President Donald Trump warned North Korea of "fire and fury" in response to recent threats from Pyongyang, which said it was examining plans for attacking Guam, a USA territory in the Pacific with a military base.

"If earnings can stay strong and interest rates remain low investors can look beyond North Korea and continue to rally equities", said Phipps. Bond and gold prices, traditional havens for nervous investors, were little changed, and the VIX, a measure of how much volatility investors expect in stocks, fell 3.3 percent following a 44.4 percent jump the day before. It's still the highest it's been since May.

As a result, Germany's 10-year government bond yields - which move inversely to the price - dropped below 0.40 percent for the first time since June 29, nearly 20 bps below its July peak.

"This inflation data for the month was not good".

The strength on Wall Street is partly due to bargain hunting, with traders picking up stocks at reduced levels following the pullback seen over the past few sessions.

Mining shares were among biggest the decliners as investors shunned assets seen as more risky.

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BIG GAINERS: Health care stocks were among the big gainers. "You're less than 2 percent off the high for the S&P heading into a weekend where uncertainty with North Korea still lingers".

Rio Tinto PLC (RIO) (RIO)(RIO) dropped 3.2%, Glencore PLC (GLEN.LN) lost 2.9%, Anglo American PLC (AAL.LN) fell 3.1%, and BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) gave up 2%. For its part, the canadian dollar traded at an average price of 78,83 US¢, up 16 cents compared to its average price of the previous day. AES Corp. shed 26 cents, or 2.3 percent, to $11.12.

The price of crude oil dropped more than two percent Thursday, the cost of a barrel falling to $48.49. Brent crude, used to price global oils, was down 35 cents to $51.55 a barrel in London.

The dollar fell to 109.85 yen from 110.48 yen late Tuesday.

Yields on bonds move inversely to their price. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.1 basis points at 2.220 percent.

Major indexes in Europe closed mostly lower.

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Shares of Kohl's were down 8.4%, while Macy's fell 4% after the department store operators reported a fall in sales. Britain's FTSE 100 was down 1.1 percent. The index is bouncing off its lowest closing level in six months. Hong Kong's Hang Seng was off 0.3 percent. It has fallen more than 1 percent on only three days this year. Japan was closed on a public holiday.

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