Stocks fall as tensions with North Korea escalate

Angelica Greene
August 13, 2017

Retailers' results are being keenly watched by investors to gauge the companies' strategy to counter No. 1 online retailer Amazon.com's growth.

South Korean stocks ended lower Friday as foreign investors sold local stocks amid escalating tensions between North Korea and the United States. The index, which hovered below record highs this week, has slipped more than 3 per cent since Mr Trump said on Tuesday that the U.S. would unleash "fire and fury" if Pyongyang continued to issue threats.

North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific island territory of Guam in an unusually detailed threat.

In the United Kingdom, the stock of TV giant ITV was down 1.9 percent in early trading, and Sky shares were down 0.5 percent, while Germany's ProSiebenSat.1 fell 1.2 percent.

Traders took heart in a measure of USA consumer prices that increased only slightly in July, pointing to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year. On the Nasdaq, 2,303 issues fell and 567 advanced.

At 12:36 p.m. ET (1636 GMT), the Dow Jones Industrial Average was down 158.98 points, or 0.72 percent, at 21,889.72 and the S&P 500 was down 27.37 points, or 1.11 percent, at 2,446.65. The stock fell $2.25 to $20.79. The S&P 500 lost 5.99 points, or 0.24 per cent, to close at 2,474.92 and the Nasdaq Composite dropped 13.31 points, or 0.21 per cent, to 6,370.46.

Shares Snap fell 1.94, or 14%, to 11.83 after the Snapchat parent reported earnings late Thursday that missed analyst forecasts.

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The Japanese yen hit an eight-week high against the United States dollar, while spot gold also reached a two-month high. According to the Associated Press, South Korea's Kospi lost 1.7 percent, while Hong Kong's Hang Seng slid 2 percent.

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The Korean won also continued to fall, down 0.45 percent to 1,147.2.

Investors also drew some encouragement from new government data showing USA inflation at the consumer level inched higher last month.

In bond markets, the yield in U.S. Treasuries fell, also pressured by the lowered expectations for a Fed move.

Data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week. Wall Street was expecting more inflation.

BONDS: Bond prices rose.

Investors instead turned to safe-haven assets such as gold, pushing it to a two-month high, and the Japanese yen rose. USA gold futures gained 0.26 percent to $1,293.50 an ounce. It is now on track for its biggest weekly drop since the week before the November 8 US presidential election.

About 6.22 billion shares changed hands on USA stock exchanges, slightly above the 6.15 billion average for the last 20 sessions.

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