Stocks rally, but end a bit lower

Xavier Trudeau
Août 13, 2017

It was a down day for Asian stocks, as traders shied away from riskier assets amid the ongoing war of words between North Korea and the U.S. The biggest loser in the region was Hong Kong's Hang Seng, which dropped 1.1%.

The US equity market is hovering near record levels and volume has been tepid following the onset of summer.

US stocks clawed back losses late on Wednesday as investors appeared to brush off geopolitical concerns after falling in the wake of US President Donald Trump's "fire and fury" warning to North Korea.

"North Korea was fodder for the overnight trade, and as we headed into today we haven't seen any more saber-rattling", said JJ Kinahan, chief market strategist at TD Ameritrade.

But the S&P Bank sub-sector fell 0.7 percent on dimming prospects of another rate hike this year since higher rates tend to boost bank profits.

Wall Street stocks dropped early Thursday after North Korea announced a plan to send missiles towards Guam, raising the stakes of a nuclear standoff with the United States.

"Markets are looking for any reason at all for a reset".

In contrast to the USA market, global equities remained weak.

For the week, the Dow is on track to fall 0.9%, its biggest one-week drop since April.

METALS: Gold, a traditional safe haven play, was moving higher.

The market volatility - the VIX index, nicknamed " the fear index, had been dashed the night before - remained high compared to the evolution since the beginning of the year.

At 12.28pm eastern time (16.28 GMT), the Dow Jones Industrial Average was down 52.87 points, or 0.24 per cent, at 22,032.47, the S&P 500 was down 2.8 points, or 0.11 per cent, at 2,472.12. MetLife fell 75 cents, or 1.6 percent, to $47.56, while Charles Schwab slid 69 cents, or 1.6 percent, to $41.33.

The Nasdaq Composite was down 115.35 points, or 1.82 per cent, at 6,236.98.

Retailers were all under pressure after Macy's and Kohl's each reported lower second-quarter sales, reviving worries about consumer discretionary stocks.

Shares of staffing firm Adecco slumped 6.4 per cent after its results.

"The yen is the big story really".

Computer hardware stocks rebounded following recent weakness, with the NYSE Arca Computer Hardware Index climbing by 1.4 percent.

Economic data showed U.S. producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while separate figures showed the number of Americans filing for unemployment benefits unexpectedly rose last week.

U.S. Treasury long-dated yields dropped to six-week lows, pressured by U.S.

"I will tell you this, North Korea better get their act together or they're going to be in trouble like few nations ever have been in trouble in this world", Trump said.

The 30-year bond last rose 5/32 in price to yield 2.8107 per cent, from 2.818 per cent late on Wednesday.

About 7.5 billion shares changed hands on US exchanges, well above the 6.25 billion average for the last 20 days.

"For now, the uptrend is very much intact in gold, reacting to external geopolitical events", said Jonathan Butler, commodities analyst at Mitsubishi in London.

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