TSX closes 143 points lower, gold rises amid US-North Korean tensions

Ivan Schwartz
August 12, 2017

In recent trading, the Nasdaq and the S&P 500 have fallen to new lows for the session.

Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose 0.14% to $1,281.06 a troy ounce.

Geopolitical concerns continue to weigh on Wall Street amid an ongoing escalation in tensions between the US and North Korea.

The Dow closed down 205 points Thursday, in its biggest decline since May 17, after a string of retailers reported weak earnings and President Donald Trump rejected criticism that his threats to release "fire and fury" had been too inflammatory.

Gold prices spiked to one-week highs Wednesday, on the back of a surge in safe haven demand, after North Korea said it is considering an attack on the US pacific territory of Guam.

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. Thursday's producer-price index came out tepid, analysts said. Economists had expected another 0.1 percent uptick. Core prices had been expected to rise by 0.2 percent.

Jobless claims increased to 244,000 in the latest week, although continuing claims declined. The dollar index slipped to a one-week low on Friday after the United States data.

Cempra (CEMP) is leading the biotech sector lower, extending the pullback seen over the course of the previous session.

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Computer hardware, semiconductor, and retail stocks are also seeing considerable weakness, while gold stocks are among the few groups bucking the downtrend.

Vietnam shares fell 2.3 per cent, their most in nine months, dragged down by financials and consumer staples.

Selling was broad. Declining issues outnumbered advancing ones on the NYSE 6-to-1; on Nasdaq, a 3.60-to-1 ratio favoured decliners.

"More likely than anything else, the price action was a function of an overextended US equity market that has been in need for a healthy correction off record highs", LMAX Exchange analysts said in a morning note. The stock is up 54% so far this year.

Chinese bluechips lost 0.75 percent, while Hong Kong's Hang Seng was 1.6 percent lower.

"The direction in global equities will likely play a major role in the yen's direction today, while the market will also be interested to see what comes of US CPI data". While the German DAX Index has inched up by 0.1%, the UK's FTSE 100 Index and the French CAC 40 Index are down by 0.9% and 1%, respectively.

In the bond market, treasuries have pulled back off their best levels but remain in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.215%.

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