Jittery stock markets fall amid global tension over North Korea

Ivan Schwartz
August 13, 2017

Eight of the 11 major S&P sectors were lower, with the consumer discretionary index's 0.59 percent fall leading the decliners. Health care companies were among the gainers.

With the tense mood pushing European shares down for a third day and Wall Street set to fall again, global stocks were on course for their worst week since Donald Trump won November's US presidential election. The S&P fell as much as 0.52 percent at its session low.

The Standard & Poor's 500 index fell 20 points, or 0.8 percent, to 2,453 as of 10:09 a.m.

Shares of Walt Disney were down 4.23 percent, the biggest drag on Dow, as investors doubted whether the company can succeed with its plan to launch its own streaming services rather than rely on Netflix to reach online viewers.

Trump ratcheted up his rhetoric toward North Korea on Thursday, saying it should be "very, very nervous" if it even thinks about attacking the United States or its allies, after Pyongyang said it was making plans to fire missiles over Japan to land near the U.S. Pacific territory of Guam. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman were all up, with the Dow Jones U.S. defense index up 1.48 percent at 409.58. It is poised to end the week down 1.9 percent.

Mounting tensions lifted US defense stocks.

The S&P 500 dropped the most since May and MSCI's gauge of stocks across the globe lost 1.1 percent in its third straight day of declines, as it pulled further back from all-time highs.

The Korean won also continued to skid, down 0.45 percent to 1,147.2, falling below its 200-day moving average for the first time in a month.

Seagate Technology gained 2.3 percent after investor ValueAct disclosed that it had acquired a 7.2 percent stake in the digital storage company.

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The S&P/TSX Composite Index slipped 39.02 points to close Wednesday at 15,217.33.

On the other hand, gold stocks have shown a strong move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 1.5%. Kohl's also declined, sliding $3.62, or 8.6 percent, to $38.31.

Hong Kong and Shanghai followed Tokyo into the red, as China factory gate inflation came in slightly below forecast amid warnings from experts of a further slowdown in the world's second-largest economy.

BONDS: Bond prices rose.

US Treasury yields fell on Wednesday, with yields on the benchmark 10-year note hitting a six-week low, as investors reached for safe-haven assets such as government debt.

Gold added $16.70, or 1.3 percent, to settle at $1,279.30 an ounce.

Oil prices edged higher after a report showed USA refineries processed record amounts of crude in the latest week, eating into inventories, although a surprise jump in gasoline stockpiles limited gains. Copper rose 1 cent to $2.91 a pound.

The market's backstop safety asset, gold, edged up to its latest two-month high of $1,288 an ounce.

German bond yields fell, gold and the Japanese yen surged and the leveraged bets on higher-yielding currencies such as the Australian dollar took a beating.

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