Wall Street falls on North Korea concerns

Xavier Trudeau
Août 13, 2017

The S&P 500 Index closed 1.5 percent lower, the Nasdaq Composite dropped 2.1 percent and the Dow Jones Composite fell 1.4 percent.

U.S. President Donald Trump told reporters at his golf club in Bedminster, New Jersey, on Thursday that he will respond forcefully to any North Korean attack on the U.S. or its allies. Of those, 52 percent delivered earnings and revenue that beat financial analysts' forecasts, according to S&P Global Market Intelligence.

However, New York Fed President William Dudley said on Thursday he expected inflation to rise and suggested that the central bank was on track to raise rates once more this year.

Bond prices, which move inversely to yields, closed higher.

The market indexes wavered between small gains and losses for much of the morning, then veered lower by afternoon.

Trump made his remarks just hours after revelations Pyongyang has successfully created a miniaturized nuclear weapon designed to fit inside its missiles . Dillard's slumped 15.5 percent after the chain booked a loss for the second quarter as increased inventory led to big discounts. The Dow slid 33.08 points, or 0.2 percent, to 22,085.34.

Wall Street's fear gauge - the CBOE Volatility Index or the VIX - surged 44%, its second-biggest one-day jump of the year.

Materials, a sector that includes gold producers and other resource-based companies, was the lone gainer among the index's 10 main sectors, rising 0.7 per cent.

Avis Budget Group Inc. slumped 9.9 percent after the auto rental company cut its guidance following a weak second quarter.

And Blue Apron shares dipped after its first earnings report as a public company. China's Tencent Holdings, whose surge in 2017 has been key to the Hang Seng's gains, fell 4.9% Friday.

Traders snapped up shares in companies that delivered strong quarterly results.

The Dow and S&P 500 clinched record closes on Monday, Aug. 7, marking the 35th all-time high for the Dow this year, a streak not seen since the 38 record closes in 2014.

A Labor Department report showed its producer price index posted a surprise drop in July, down 0.1% for the largest slide in nearly a year.

Shares of health care equipment and services company Henry Schein Inc. declined amid a broader slide by health care stocks.

"We have not had a 5 percent correction since June 2016".

USA crude oil futures settled almost 2 per cent lower at $48.59 a barrel, as Russian Federation considered a future output resumption and the Organization of the Petroleum Exporting Countries boosted its July production numbers. The September copper contract was down two cents to US$2.91 a pound.

Markets overseas were mixed Tuesday. Germany's DAX fell 0.9 percent, while the CAC 40 in France lost 0.5 percent. Silver gained 20 cents, or 1.2 percent, to $17.07 an ounce.

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