Wall St down for the week on N Korea

Xavier Trudeau
Août 13, 2017

The three major US stocks indexes ended higher on Friday, snapping three days of losses, as investors bet on slower USA rate hikes, but gains were muted by increasingly aggressive exchanges between the United States and North Korea.

While the data gave investors appetite for growth sectors, such as information technology and biotechnology, it soured them to rate-sensitive stocks, such as banks, said Keith Lerner, chief market strategist at SunTrust Advisory Services Inc in Atlanta. Utilities companies were down the most.

Investors had rushed to safe-haven assets after strongly worded exchanges between Washington and nuclear-armed North Korea late on Tuesday.

The Dow Jones Industrial Average rose 44.33 points, or 0.2 percent, to 21,888.34, the S&P 500 gained 6.01 points, or 0.25 percent, to 2,444.22 and the Nasdaq Composite added 32.10 points, or 0.52 percent, to 6,248.97.

"That reset is being triggered by North Korea geopolitical concern and stretched valuations", said Peter Kenny, senior market strategist at Global Markets Advisory Group in NY.

President Trump took aim at North Korea again on Thursday, saying that his earlier threat to unleash "fire and fury" may not have gone far enough. Earlier in the week, Trump said the USA would unleash "fire and fury" on North Korea if it continued to threaten the U.S.

There were fewer signs of anxiousness in the markets Friday. It's still the highest it's been since May.

The Bureau of Labor Statistics will publish its July inflation report at 8:30 a.m. ET.

But the yen added to an already-strong weekly rally of close to 1.5 percent, hitting its highest in nearly four months versus the dollar at 108.73 yen.

The smaller than expected increase in consumer prices has led to optimism that the Federal Reserve will not be in a hurry to raise interest rates. But some economists say the Fed may stand pat for the rest of 2017 unless inflation accelerates in coming months.

Data storage company Seagate Technology (STX) is posting a standout gain within the hardware sector, climbing by 2.1 percent. KLA-Tencor gained $2.62, or 3 percent, to $90.17. "You're less than 2 percent off the high for the S&P heading into a weekend where uncertainty with North Korea still lingers".

The suspected range of North Korea's missiles based on their ICBM tests. Chris Jones  IFLScience
The suspected range of North Korea's missiles based on their ICBM tests. Chris Jones IFLScience

South Korea's KOSPI fell 1.7 percent on Friday to its lowest since May 24, but its losses for the week were a relatively modest 3.2 percent.

Large retailers Macy's and Kohl's tumbled on Thursday after they reported another quarter of shrinking sales.

The pan-European FTSEurofirst 300 index lost 1.06 percent and MSCI's gauge of stocks across the globe shed 0.17 percent.

USA crude rose 0.41 per cent to US$48.79 per barrel and Brent was last at US$52.01, up 0.21 per cent. Brent crude, used to price worldwide oils, was down 35 cents to $51.55 a barrel in London.

Neil Mellor, a currency strategist with Bank of New York Mellon in London, said the pound was "drifting towards the lows from last month against the dollar".

BONDS: Bond prices fell.

Benchmark 10-year notes last rose 5/32 in price to yield 2.194 percent, from 2.211 percent late on Thursday.

Apart from geopolitical worries, some technical analysts like Tom McClellan, editor of the McClellan Market Report, blamed seasonality for this week's retreat given August's record as a weak month for stocks. Germany's DAX was flat, while France's CAC 40 fell 1.1 percent.

Significant strength is also visible among computer hardware stocks, as reflected by the 1.1 percent advance by the NYSE Arca Computer Hardware Index. The index bounced off its lowest closing level in six months.

On Thursday, the CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the United States presidential election. Australia's S&P/ASX 200 dropped 1.2 percent. The Japanese markets were closed for a holiday.

D'autres rapports CampDesrEcrues

Discuter de cet article

SUIVRE NOTRE JOURNAL