U.S. stocks fall again on North Korea tensions

Ivan Schwartz
August 13, 2017

Nvidia's quarterly revenue in its data center and automotive businesses missed estimates, dragging the chipmaker's shares down 5.43 percent.

Nasdaq 100 e-minis were down 1 points, or 0.02 percent, on volume of 49,062 contracts.

Wall Street stocks posted their biggest declines in almost three months on Thursday as President Donald Trump doubled down on his warnings to North Korea over its nuclear programme. May 17 was the last time the three indexes had a bigger single-day decline.

Mr Trump, whose threat this week to bring "fire and fury" was dismissed by North Korea, said Thursday that statement might not have been "tough enough".

Wall Street's fear gauge - the CBOE Volatility Index or the VIX - surged 44%, its second-biggest one-day jump of the year.

The VIX rose further on Wednesday, rising as far as 12.11, its highest in nearly a month.

His comments came in response to North Korea's threat to fire ballistic missiles toward the USA territory of Guam, which is home to US bombers and other strategic assets.

In Europe, the pan-continental STOXX 600 index fell 0.9 per cent, with falls deepening after a auto rammed a group of soldiers in Paris, injuring six, in what officials said was a suspected terrorist attack.

Politics lifted US defence stocks. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman all rose and the Dow Jones US defence index was up 1.6 per cent after hitting a record high.

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A US Navy destroyer recently sailed near Mischief Reef in the disputed South China Sea in a freedom of navigation operation. China's Foreign Ministry accused the US Navy of breaking "international laws" in a statement released this afternoon.

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Computer hardware stocks rebounded following recent weakness, with the NYSE Arca Computer Hardware Index climbing by 1.4%. The Swiss currency was also on track for its biggest daily gain against the euro since the Swiss National Bank removed its cap on the currency in January 2015.

In Europe, the Stoxx 600 Index fell 1%.

North Korean provocations historically have not caused long-term stock market declines on their own, but the situation is in flux, and investors must pay close attention, said James Cheo, an investment strategist at Bank of Singapore.

In the latest economic data, the consumer-price index (http://www.marketwatch.com/story/us-consumer-inflation-remains-soft-in-july-cpi-shows-2017-08-11) rose a seasonally adjusted 0.1% in July, its fifth straight month of softness, raising more questions about whether inflation will eventually rise to hit the Federal Reserve's 2% annual rate target.

Yields on core government debt fell.

The Dow Jones Industrial Average fell 36.64 points or 0.17 per cent to end at 22,048.7, the S&P 500 lost 0.9 point or 0.04 per cent to 2,474.02 and the Nasdaq Composite dropped 18.13 points or 0.28 per cent to 6,352.33.

The overall stock market, meanwhile, has been on a tear this year. Companies in the S&P 500 are set to report stronger second-quarter earnings than analysts expected, according to FactSet, lifted by oil-and-gas companies benefiting from stabilizing oil prices and multinational firms profiting from a weaker dollar.

Hong Kong shed more than one per cent in afternoon trade and Shanghai closed down, while Seoul shares continued their sell-off after slumping Wednesday, with the won again softening.

Other reports by GizPress

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