Wall Street Reels Under North Korea Tensions, Tepid Retail Earnings

A man watches a television screen showing U.S. President Donald Trump left and North Korean leader Kim Jong Un during a news program at the Seoul Train Station on Thursday

Traders said hedge funds had cut leveraged bets against the franc, prompted in part by worries about increased US-North Korea tension, though some analysts said gains may be overdone.

US stocks rose Friday but were still on track for their biggest weekly loss in months, shaken by disappointing earnings results and an escalation of threats between the USA and North Korea.

"Despite all this rhetoric, there is a general feeling that we are not going to go up to the war", said Karl Haeling, holding that this had provided little support to the market.

North Korea dismissed on Thursday warnings by US President Donald Trump that it would face "fire and fury" if it threatened the United States as a "load of nonsense", and outlined detailed plans for a missile strike near the Pacific territory of Guam.

Biotechnology, tobacco, and transportation stocks also saw considerable strength, while steel stocks extended a recent move to the downside. The stock fell $169 to $1,879.98.

"The gold market shows various signs of ambivalence and we believe that this pattern will continue into the foreseeable future", Norbert Rücker, head of macro commodity research at Julius Baer, said in a note.

Prices rose by just 0.1% last month, below expectations, with the annual inflation rate up to 1.7% from 1.6%. Netflix also fell, giving up $3.37, or 1.9 percent, to $174.99. Perrigo rose $1.58, or 2.1 percent, to $78.43.

The S&P 500, which had its biggest one-day drop in nearly three months on Thursday, was on track to post its biggest weekly decline since November. It has been more than a year since the last 5% downdraft in stocks and more than 76 weeks since the stock market suffered a 10% loss.

Major indexes in Europe were mixed. Britain's FTSE 100 was down 1%. Germany's DAX was flat, while France's CAC 40 fell 1.1 percent.

Gold fell $2.10 to $1,262.60 an ounce.

Benchmark U.S. crude fell 22 cents to $49.17 a barrel on the New York Mercantile Exchange. Hong Kong's Hang Seng shed 2% Friday and lost 2.5% for the week - its biggest weekly decline of the year.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, rose to a near three-month high of 15.36.

The euro dipped 0.1 per cent to $1.1733 but the single European currency has been slipping this week against the dollar, having hit a more than 2 1/2-year high of $1.1892 on August 2. Brent crude, used to price global oils, gained 29 cents to $52.43 in London.

China's Shanghai Composite Index plunged 51.94 points or 1.6 percent to 3,209.80, as investors continued to book profits in cyclical sectors.

Japanese markets were closed for a holiday but the in-demand yen powered on, hitting an eight-week high of 108.91 yen to the dollar, adding to its biggest weekly gain since May. Ten-year USA yields dropped 4.3 basis points to 2.24 per cent and German equivalents fell 3 bps to 0.43 per cent, a six-week low.

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