Yen gains broadly on latest bout of Korean tensions

Ivan Schwartz
August 13, 2017

The S&P 500 index had its biggest one-day drop in nearly three months on Thursday (Aug 10) as investors fled riskier assets, with technology stocks leading the charge, in response to an increasingly aggressive exchange of threats between the United States and North Korea.

Trump said on Thursday that his first threat to unleash "fire and fury" may not have been tough enough.

The CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the USA presidential election on Thursday, but was down 1.22 points at 14.82 points on Friday.

Stocks around the world fell sharply on Thursday and investors moved into the yen, gold and other safe-haven assets amid more aggressive talk between the United States and North Korea.

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

This week's increase in tension between North Korea and the USA over North Korea's nuclear missile programme is a timely warning for investors to remain diversified, affirms a leading analyst.

The market was also waiting for United States inflation data on Friday that would offer clues about the extent to which the strengthening U.S. labour market is spilling over into inflation. "Limited news flow is what can be blamed for the narrow trading ranges, but expect this to change as we get closer to Friday's U.S. CPI release". While the Nasdaq climbed 39.68 points or 0.6 percent to 6,256.56, the Dow inched up 14.31 points or 0.1 percent to 21,858.32 and the S&P 500 edged up 3.11 points or 0.1 percent to 2,441.32.

Stocks fall as tensions with North Korea escalate
About 6.22 billion shares changed hands on USA stock exchanges, slightly above the 6.15 billion average for the last 20 sessions. Shares Snap fell 1.94, or 14%, to 11.83 after the Snapchat parent reported earnings late Thursday that missed analyst forecasts.

New tropical storm soon? Hurricane center watching area near Bahamas
Tropical Depression Eight's sustained winds are at 35 miles per hour and the minimum pressure is at 1011 millibars. The favored offshore track would limit the hazards to cruise and shipping interests, as well as beachgoers.

Sales of gold bars rising amid rising tension on peninsula
The latest sell-off was the most severe yet, amounting to the biggest single-day drop for the stock market in almost three months. Trump launched another rhetorical salvo at the North to keep its nuclear weapons and ballistic missile programmes in check. .

Most large-cap stocks fell across the board.

The dollar weakened after news that US producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase. It is not just North Korea that has the potential to surprise investors.

The Dow Jones industrial average closed up 14 points, a gain of 0.07 percent, the Nasdaq composite rose almost 40 points or 0.64 percent and the S&P 500 gained 3 points or 0.13 percent. The Russell 2000 index gave up 24.40 points, or 1.8 percent, to 1,372.54. The low rates have been in recent years one of the fuels of the stock market. Gold rose 1.2 per cent, while the Swiss franc was on track to post its biggest single day rise in about two-and-a-half years. While the French CAC 40 Index fell by 0.6%, the German DAX Index slumped by 1.1% and the UK's FTSE 100 Index plunged by 1.4%.

The dollar fell to 109.85 yen from 110.48 yen late Tuesday.

Benchmark 10-year notes were last up 12/32 in price to yield 2.201 percent, from 2.242 percent late on Wednesday. Major indexes in Asia closed lower. The euro fell to $1.1728 from $1.1757.

BONDS: Bond prices rose. Disappointing company earnings also helped pull the market lower, with consumer-focused companies and technology stocks among the biggest decliners.

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