Wall Street opens lower as tensions with North Korea escalate

Updated: Wed, Aug 09, 2017
07:24 pm
Reuters

U.S. stock indexes opened lower on Wednesday as investors turned risk averse following rising tensions between North Korea and the United States.

North Korea said it was considering plans to fire missiles at Guam, a U.S.-held Pacific island, after President Donald Trump on Tuesday warned the nuclear-armed nation that it would face "fire and fury" if it threatened the United States.

Safe-haven assets gained following the mounting geopolitical tensions. Gold rose 1.2 percent, while the Swiss franc was on track to post its biggest single day rise in about two-and-a-half years.

Trump`s comments also sparked a late afternoon selling on Tuesday, with the Dow ending a nine-day streak of closing records.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, was up 1.03 points at 11.98 points, its highest level in a month.

"The geopolitical tensions have prompted a risk off trade amid investors," said Naeem Aslam, chief market analyst at Think Markets UK.

"Trump`s comments about North Korea have created nervousness and the fear is if the president really means what he said "fire and fury". The typical textbook trade is that investors rush for safe haven, hence we have experienced a bounce for the gold price."

At 9:37 a.m. ET (1337 GMT), the Dow Jones Industrial Average was down 49.62 points, or 0.22 percent, at 22,035.72, the S&P 500 was down 8.01 points, or 0.32 percent, at 2,466.91.

The Nasdaq Composite was down 44.19 points, or 0.69 percent, at 6,326.27.

Seven of the 11 major S&P sectors were lower, with the consumer discretionary index`s 10.2 percent fall leading the decliners.

Shares of Dow component Walt Disney were down 4.44 percent after the company said it will stop providing new movies to Netflix and launch its own streaming service. Netflix was down 3.22 percent.

Travel website operator Priceline fell 6.72 percent, while travel-review website operator TripAdvisor was down 7.74 percent after both the companies issued disappointing forecasts.

Mylan NV was down 4.88 percent after the EpiPen maker said delays in launching key new drugs and eroding prices for generics in the United States would hurt its profitability this year and in 2018.

Burger chain Wendy`s was up 4.20 percent after it reported better-than-expected quarterly profit and sales.

Declining issues outnumbered advancers on the NYSE by 1,859 to 737. On the Nasdaq, 1,787 issues fell and 564 advanced.

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

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