United States stocks tumble on North Korea worries

Xavier Trudeau
Août 13, 2017

If the North Korean regime "does anything" to the U.S. or a USA ally "things will happen to them like they never thought possible", he told reporters on Thursday, according to Bloomberg.

The Dow Jones Industrial Average rose 43 points, or 0.2%, to 21,885, led by Apple Inc. "When earnings are not beating expectations there's a sell off in the companies, and we're just not seeing that money reinvested because of the geopolitical risks". The S&P 500 gained 6 points, or 0.2%, to 2,444, supported by gains in consumer-discretionary, technology and health-care sectors.

Even so, Wall Street remains near record highs.

"We're still close to the all-time high so that makes people a little nervous too, so they might say now might be the time to take a little bit of money off the table".

"It's fantastic when you consider the headlines just how calm the equity markets are, how they've taken things in their stride", said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.

North Korea responded with a statement by its official KCNA news agency claiming Trump is "driving" the Korean peninsula to the "brink of a nuclear war".

"Although we certainly can get a 5 to 7 percent correction, we don't think it's the start of a significant bear market", Peterson noted.

The benchmark USA yield on Thursday was just above 2.2 percent, at its lowest level since late June, as investors bought up Treasuries, a classic safe harbor.

Kohl's, another department store chain, slumped 8.9 percent after reporting that second-quarter sales dipped 0.9 percent compared with the year-ago period. South Korea's KOSPI fell 1.8 percent to almost a three-month low.

Shares of Snapchat parent Snap Inc.(SNAP) slid 11% a day after the company's earnings missed forecasts (http://www.marketwatch.com/story/snap-ceos-promise-cant-overcome-declining-ad-rates-stock-heads-toward-new-lows-after-earnings-2017-08-10), and the social-messaging company disclosed that average ad prices fell in the second quarter.

The latest USA economic data cemented expectations that inflation will remain subdued amid a robust labour market.

Investors bought bonds after the Labor Department said the consumer-price index increased 0.1% in July from the previous month. "The pot is on the stove boiling but no inflation steam is coming out".

While gold, a safe-haven favourite, pared some gains it was last up 1.2 per cent at around its highest since mid-June, while the Swiss franc and the Japanese yen also rose.

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