Stock markets lower, gold price continues to rise amid political tensions

Stock Market Sell-off Sends Investors into Safe-haven Assets after Trump Issues Warning to North Korea

The yield on the 10-year Treasury bond fell to 2.2% and is approaching its lowest level of the year. Only utilities sector stocks eked out a gain on a day of mostly listless trading as investors kept an eye on the latest company earnings and geopolitical news. Indeed, US equities sold off at the open and added to those losses this afternoon following President Trump's latest warning to North Korea.

Trump's threats have escalated since reports broke at the beginning of the week that North Korea had successfully produced a nuclear warhead that could fit inside its missiles.

"That may have weighed a little bit" on markets, said Phil Guarco, global investment specialist J.P. Morgan Private Bank.

The Nasdaq Composite was down 16.88 points, or 0.26 percent, at 6,353.58. And when the S&P 500 breaks a streak of 50+ trading days without a 1%+ up move, the index actually averages a decline over the next month and a gain of just 0.86% over the next three months. The Russell 2000 index of smaller-company stocks gave up 4.02 points, or 0.3 percent, to 1,410.15. The S&P 500 is up 9 percent, while the Dow is up 10.6 percent. "What's happened in North Korea is enough to do that".

US President Donald Trump ratcheted up his rhetoric toward North Korea on Thursday, saying the reclusive communist country should be "very, very nervous" if it even thinks about attacking the United States or its allies.

Kohl's stock dropped almost six percent despite better than expected earnings.

Watch maker Fossil Group plunged 25 percent after reporting a weak quarter. Netflix lost 1.5 per cent.

Asia-focused financial stocks, namely Prudential and Standard Chartered were among the main fallers.

Traders snapped up shares in companies that delivered strong quarterly results. The index had its biggest drop since mid-May a day earlier.

The CBOE Volatility Index .VIX , 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.

The Dow Jones Industrial Average shed 0.2 per cent to close the day at 22,048.70. The euro fell to $1.1791 from $1.1774. Natural gas gained 2 cents to $2.82 per 1,000 cubic feet.

Safe havens benefited from the move away from stocks - gold rising again to around $1,290 an ounce after surging 1.3 percent Wednesday - but other risky assets such as oil and copper held their price.

Meantime, on the commodity front oil prices fell 2 per cent while gold has maintained its two month high.

On the currency markets, the pound edged 0.2% lower versus the USA dollar at 1.298, as traders responded to another tranche of lacklustre data from the United Kingdom economy.

Markets overseas were mixed Tuesday. Britain's FTSE 100 was down 1.1 percent.

The overall financials group, which accounts for roughly a third of the index slipped 0.9 percent.

This is causing understandable concern over the border in South Korea.

Related:

Comments


Other news