Published: Sun, August 13, 2017
Technology | By Timothy Carter

Trump escalates North Korea tension


News late Tuesday that North Korea was reviewing plans for an attack on USA military assets on the island of Guam came just hours after President Trump had warned that continued threats would be met "with fire and fury like the world has never seen".

U.S. stocks have risen week after week this year - with the S&P up more than 9 percent - in extremely low volatility, as strong corporate earnings and an improving global economy offset disappointment that U.S. President Donald Trump's promises to lower corporate taxes and implement a massive infrastructure spending have so far failed to see the light of day.

Mattis said North Korea must stop isolating itself and "stand down" in its pursuit of nuclear weapons, and Pyongyang "should cease any consideration of actions that would lead to the end of its regime and the destruction of its people".

Gains among technology companies helped snap a three-day losing streak for US stocks Friday, though the market ended with its worst weekly loss since March. 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. The Dow Jones industrials average gained 14.31 points, or 0.1 percent, to 21,858.32. Energy stocks fell along with crude prices as investors kept an eye on the latest company earnings and geopolitical news.

The weakness among oil service stocks comes even though the price of crude oil for September delivery is inching up USD0.01 to USD49.18 a barrel.

In the United Kingdom, the FTSE 100 closed down 0.59%, or 44.67 points, at 7498, broadly in line with negative trends in European markets.

Mr Trump warned Kim Jong Un earlier this week that his country faced "fire and fury".

The remarks followed a new report asserting that U.S. intelligence has assessed that Pyongyang has successfully produced a nuclear warhead that can fit inside its missiles. Germany's DAX Index fell 0.6 percent, while the UK's FTSE 100 Index retreated 1.2 percent, and France's CAC 40 Index slid 1.4 percent.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, was up as much as 12.63 points, its highest in more than a month. The Dow slid 0.2 percent to 22,085.34.

Investors opted for the perceived safety of US Treasuries, which pushed the yield on the 10-year note three basis points lower to 2.21 percent.

First, a wave of selling doused Asia's markets - sending Tokyo's Nikkei 225 down 1.3% and pressuring South Korea's Kospi Index to a 1.1% decline.

J.C. Penney sank 16.6 percent after the struggling department store chain reported quarterly results that fell short of Wall Street's expectations. Netflix lost 1.5 per cent.

The dollar slipped to 109.04 yen from 109.26 late Thursday. The euro edged down to $1.1727 from $1.1751.

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