Dow slips 100 points as tensions with North Korea escalate

Ivan Schwartz
Августа 13, 2017

The remarks, following North Korea's earlier revelation of a plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, gave investors further incentive to take to the sidelines at least in stock markets.

Keeping up his tough talk, U.S. President Donald Trump told reporters that North Korean leader Kim Jong Un's government should "get their act together" or face the consequences, and suggested that his earlier threat to unleash "fire and fury" on North Korea was too mild.

"The overall "Fear Factor" is the markets worst enemy that will feed on itself, leading to increased hedging". "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.

The Nasdaq finished the day at 6,216.87, a slide of 135.46, while the S&P 500 lost almost 1.5 percent, ending the day at 2,438.21.

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.

The Nasdaq Composite was up 38.25 points, or 0.62 percent, at 6,255.12. The consumer discretionary index was one of its biggest losers with a 0.47 percent drop. The S&P 500 is up 9 percent, while the Dow is up 10.6 percent.

Separately, US producer prices unexpectedly fell in July, recording their biggest drop in almost a year, weighed down by declining costs for services and energy products.

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Retail results are also on investors' mind as the second-quarter earning season winds down.

"This inflation data for the month was not good". The pan-European benchmark on Wednesday fell 0.7% in a sell-off prompted by tensions between the USA and North Korea escalated.

The consumer price data, which pointed to weak inflation, could cause the Federal Reserve to hold off from raising rates again this year.

Blue Apron shares hit a record low at $5.03 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 advancing ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq, a 2.47-to-1 ratio favored decliners. Netflix also fell, giving up $3.37, or 1.9 percent, to $174.99.

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