US Stock Indexes Edge Higher in Midday Trading; Oil Slides

Xavier Trudeau
Août 13, 2017

On Thursday, in response to North Korea's threat to fire missiles at American targets in the Pacific, President Trump said that if Pyongyang "does something in Guam, it will be an event the likes of which nobody has seen before - what will happen in North Korea". 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, slid 6.7% following a 44.4% jump the day before.

The Labor Department said consumer prices edged up 0.1% in July following no gain in June. Inflation has risen 1.7 percent over the past 12 months, suggesting that inflationary pressures remain well under control. Hong Kong slumped 2.04 per cent, Shanghai slipped 1.63 per cent, Korea shed 1.69 per cent, Jakarta fell 1.03 per cent. Singapore shares also ended in negative territory as increasingly bellicose talk between the United States and North Korea prompted investors to take money off the table, while traders trimmed positions ahead of the weekend. KLA-Tencor gained $2.62, or 3 percent, to $90.17. The boost today continues the rental auto stock's pattern of big post-earnings moves, and has the shares testing their 180-day moving average, a level the stock has not surpassed since September 2016.

Benchmark 10-year notes last rose 5/32 in price to yield 2.194 percent, from 2.211 percent late on Thursday. Universal Health Services picked up $2.65, or 2.5 percent, to $108.02.

J.C. Penney sank 16.6% after the struggling department store chain reported quarterly results that fell short of Wall Street's expectations. The company also said that sales at its established stores declined for the fourth consecutive quarter.

Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea have proved to be the trigger.

Among the stocks with unusual volume is retail stock Macy's Inc (NYSE:M), with roughly 11,000 calls traded.

Nvidia Corp.(NVDA) shares fell 5.5%, even after the chip maker posted upbeat earnings late Thursday. On the Nasdaq, 1,378 issues rose and 892 fell.

Other markets: Oil turned lower after the International Energy Agency said oil supply rose for a third month as compliance with an OPEC output deal faltered but prices have rebounded (http://www.marketwatch.com/story/oil-prices-head-lower-as-global-tensions-continue-unabated-2017-08-11) to edge up.

US crude fell 0.41 percent to $48.39 per barrel and Brent was last at $51.68, down 0.42 percent on the day.

MARKETS OVERSEAS: Major indexes in Europe were mixed.

The pan-European FTSEurofirst 300 index lost 1.06 percent and MSCI's gauge of stocks across the globe shed 0.17 percent. Britain's FTSE 100 was down 1%. In Asia, several indexes closed lower overnight.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize.

This article was originally published at 6:55 a.m.

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