Saturday, 19 August, 2017

Global stocks shudder on Trump warnings to North Korea

Dow's nine days of records finally ends Drew Angerer Getty Images
Nellie Chapman | 13 August, 2017, 14:26

Cracks are showing in what has been a virtually non-stop US equity rally after a rapid escalation of tension between North Korea and the United States this week.

The tentative gains "suggest that the headline shock value pertaining to the US-North Korea standoff is starting to dissipate, which is to say actual action will now speak much louder than words", said Briefing.com analyst Patrick O'Hare.

Global stock markets have sunk further into the red after Donald Trump ratcheted up his fiery rhetoric over North Korea's nuclear threats.

S&P 500 e-minis were up 1.5 points, or 0.06 percent, with 300,073 contracts traded.

U.S. stocks ended lower on Thursday, and Asian markets fell sharply, with Hong Kong's Hang Seng index dropping 2%.

Macy's shares closed down 10.2 per cent and Kohl's fell nearly 6 per cent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off. Eastern time. The Dow Jones industrial average slid 105 points, or 0.5 per cent, to 21,943.

Investors are increasingly nervous: The VIX volatility index, a closely-watched "fear gauge", is up 70% since Tuesday.

The Nasdaq, Wall Street's home to many high profile tech companies, finished the day down more than 2%. Core prices had also been expected to climb by 0.2 percent. On the Nasdaq, 1,846 issues fell and 953 advanced favouring decliners.

Oil prices rose before a report expected to show US crude stocks fell for a sixth week. Shares of J.C. Penney dropped 78 cents, or 17%, to $3.93 Friday after the department store's second-quarter loss exceeded expectations.

UNDERCOOKED: Blue Apron slumped 12.2 per cent after the meal kit seller reported a sequential decline in customers in the second quarter due to a planned reduction in marketing. The stock fell 76 cents to $5.48.

The yield on the 10-year Treasury bond fell to 2.2% and is approaching its lowest level of the year. The major index futures are now pointing to a modestly higher open for the markets, with the Dow futures up by 21 points. That is significant because yields fall when bond prices rise.

The latest sell-off was the most severe yet, amounting to the biggest single-day drop for the stock market in almost three months. While the German DAX Index has edged down by 0.1%, the French CAC 40 Index and the UK's FTSE 100 Index are both down by 1%.

CURRENCIES: The dollar slipped to 109.35 yen from 109.85 late Wednesday.

The news was also greeted with dismay by traders in Asia, with Tokyo down 1.3 percent, Hong Kong losing 0.4 percent and Seoul registering a 1.1-percent decline.

The index was also dragged lower after Beijing ordered probes into three major Chinese social networking platforms over outlawed content.