Wall Street to open lower as N.Korea missile test rattles investors

Updated: Tue, Aug 29, 2017
06:38 pm
Reuters
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U.S. stocks were set to open sharply lower on Tuesday as North Korea`s missile test over Japan escalated tensions with the United States, and President Donald Trump warned that "all options are on the table".

The Dow e-minis were down 108 points, while the Nasdaq 100 e-minis were down 46 points.

The missile, tested early on Tuesday, flew over Japan and landed in the Pacific about 735 miles off the northern region of Hokkaido, a rare occasion when North Korea fired projectiles over mainland Japan.

"Threatening and destabilizing actions only increase the North Korean regime`s isolation in the region and among all nations of the world. All options are on the table," Trump said in a statement.

Earlier this month, North Korea threatened to fire four missiles into the sea near the U.S. Pacific territory of Guam after Trump warned that the reclusive country would face "fire and fury" if it threatened the United States.

"It is a risk-off mode and ... investors are either staying on the sidelines for this dust to settle or booking their gains," said Naeem Aslam, chief market analyst at Think Markets UK.

Investors scampered to safe-haven assets, with gold jumping to its highest since November and the benchmark U.S. 10-year treasury yield dipping to its lowest since the day after the Nov. 8 U.S. presidential election.

The news also jolted the CBOE Volatility index, which rose 1.94 points to 13.26.

Investors have been pouring into exchange-traded products (ETPs) linked to Vix, particularly and, that were up about 13 percent and were among the most active issues in premarket trading. iShares MSCI Emerging Markets ETF was down nearly 1 percent.

The S&P and the Dow ended little changed on Monday, with energy and bank shares lower as Tropical Storm Harvey crippled the U.S. energy hub in Texas.

"The effects of Hurricane Harvey are still going to remain prominent as the flooding continues. It is going to have some serious economic impact and just how large that would be is still unclear," Aslam said.

At 8:30 a.m. ET (1230 GMT), Dow e-minis were down 108 points, or 0.5 percent, with 51,360 contracts changing hands.

S&P 500 e-minis were down 13.25 points, or 0.54 percent, with 363,037 contracts traded.

Nasdaq 100 e-minis were down 46 points, or 0.79 percent, on volume of 67,545 contracts.

U.S.-listed shares of gold miners including Kinross Gold and Harmony Gold were up about 5 percent in premarket trading.

Dow component Nike fell 2.31 percent after Morgan Stanley cut its price target by $4 to $64.

Finish Line plunged about 29 percent after the sporting goods retailer cut its full-year profit forecast and adopted a poison pill.

Electronics retailer Best Buy were down about 1 percent despite raising its full-year revenue forecast.

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

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