Published: Sat, August 12, 2017
Money | By Oscar Reynolds

Trump and North Korea tensions weigh on stocks

Trump and North Korea tensions weigh on stocks

Geopolitical concerns continue to weigh on Wall Street amid an ongoing escalation in tensions between the USA and North Korea. The broad-based S&P 500 dropped 0.2 percent to 2474.92 points, and the Nasdaq dropped 0.2 percent to 6370.46 points.

The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.0 percent to C$93.36, and Manulife Financial Corp falling 2.8 percent to C$24.93. The Nasdaq composite lost 0.2 percent, to 6,370.46.

Pyongyang responded to provocations from President Trump and said it would consider using missiles against US military bases in Guam. Also, the figures and forecasts of auto rental company Avis were disappointing and that share trimmed 10 percent.

Gold was the big victor Wednesday as stocks pared back to moderate losses and Walt Disney (DIS) dragged on the Dow, while Netflix (NFLX) and Priceline Group (PCLN) hindered the Nasdaq and retailers took some brutal hits after reporting second-quarter results.

Canadian Tire Corp Ltd rose 3.4 percent to C$146.65.

Declining issues outnumbered advancing ones on the TSX by 164 to 80, for a 2.05-to-1 ratio on the downside.

At a briefing on opioid addiction at his golf course in Bedminster, New Jersey, Mr Trump warned North Korea not to make any more threats against the United States, adding that it would be "met with fire and fury like the world has never seen".

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. The 10-year Treasury note yield initially fell to a six-week low of 2.212 percent as bond prices rose, but pulled back to 2.251 percent. Netflix fell 2.4 percent. Gold prices increased 1% and the Swiss franc gained against all major currencies.

The financial sector (-1.8%) also underperformed the broader market, as did the consumer discretionary group (-1.5%), which was hurt by retailers as shown by the 3.1% plunge in the SPDR Retail ETF.

Tokyo's Nikkei 225 tumbled 1.3 percent to 19,737.59 points and Seoul's Kospi fell 0.7 percent to 2,378.56.

Nevertheless, APRN is down 12.7% in pre-market trading, headed for a record low.

In other precious metals, silver rose 0.4 per cent to $16.48 per ounce. Brent crude, used to price global oils, gained 10 cents to $52.24 in London.

The US dollar fell to 110.48 yen from 110.72 yen late on Monday.

USA gold futures for December delivery rose 0.4% to US$1,284.40 per ounce.

On the currency front, the U.S. dollar is trading at 109.73 yen compared to the 110.07 yen it fetched at the close of NY trading on Wednesday.

Stocks were trading lower on Thursday, Aug. 10, as the threat of conflict with North Korea continued to percolate. The euro strengthened to $1.1756 from $1.1752.

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