Simmering North Korea tensions knock back Wall Street

Updated: Thu, Aug 10, 2017
10:39 pm
Reuters
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U.S. indexes were trading at session lows on Thursday afternoon, with the Dow and the Nasdaq posting triple-digit point declines, as investors fretted over escalating tensions between the United States and North Korea.

North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific island territory of Guam in an unusually detailed threat.

The threat followed U.S. President Donald Trump`s warning on Tuesday that any threats by Pyongyang would be "met with fire and fury like the world has never seen".

"Markets are looking for any reason at all for a reset. That reset is being triggered by North Korea geopolitical concern and stretched valuations," said Peter Kenny, senior market strategist at Global Markets Advisory Group, New York.

Trump`s comments on Tuesday ended the Dow`s nine-day streak of record closes.

Investors on Thursday scampered to safe-haven assets such as gold and the Swiss franc, helping the precious metal hit a more two-month high.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, rose to a near three-month high of 15.36.

At 12:36 p.m. ET (1636 GMT), the Dow Jones Industrial Average was down 158.98 points, or 0.72 percent, at 21,889.72 and the S&P 500 was down 27.37 points, or 1.11 percent, at 2,446.65.

The last time the S&P 500 fell over 1 percent was on May. 17.

The Nasdaq Composite was down 115.35 points, or 1.82 percent, at 6,236.98. Apple was down 2.3 percent, weighing most on the index.

Shares of Macy`s tumbled 9.5 percent and Kohl`s 6.7 percent after the department store operators reported a drop in quarterly same-store sales that stoked concerns that their turnaround may still be a long way off.

Retailers` results are being keenly watched by investors to gauge the companies` strategy to counter No. 1 online retailer Amazon.com`s growth.

Data showed U.S. producer prices unexpectedly fell in July, recording their biggest drop in nearly a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week.

"This inflation data for the month was not good. Wall Street was expecting more inflation. Every August we have some reason to run up the alarm", Kenny said.

However, Federal Reserve Bank of New York President William Dudley suggested on Thursday that the central bank was on track to raise interest rates once more as he expects sluggish inflation to rise over the next several months.

Blue Apron slumped as much as 19.1 percent to a record low after the meal-kit delivery service provider reported a bigger-than-expected loss in its first quarterly report as a public company.

Perrigo surged 17.6 percent after the drugmaker raised its full-year adjusted profit forecast. Declining issues outnumbered advancers on the NYSE by 2,461 to 444. On the Nasdaq, 2,303 issues fell and 567 advanced.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

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