Korean shares open lower amid escalating tensions over N. Korea

Brewing tensions between the USA and North Korea put investors in a selling mood again Thursday, dragging US stocks lower for the third day in a row.

While the Nasdaq climbed 39.68 points or 0.6 percent to 6,256.56, the Dow inched up 14.31 points or 0.1 percent to 21,858.32 and the S&P 500 edged up 3.11 points or 0.1 percent to 2,441.32.

Benchmark U.S. crude fell 97 cents, or 2 percent, to $48.59 a barrel on the New York Mercantile Exchange.

Dow e-minis were up 6 points, or 0.03 percent, with 29,187 contracts changing hands at 8:34 a.m. ET (1234 GMT).

"The escalation of the geopolitical situation between the USA and North Korea is beginning to rattle investors' nerves as was witnessed in the VIX index yesterday", said Peter Cardillo, chief market economist at First Standard Financial.

Investors have been pointing to a number of factors that could drive stocks lower, including valuations that are elevated relative to historical levels, and an uncertain outlook for monetary and fiscal policy.

Investors had rushed to safe-haven assets after strongly worded exchanges between Washington and nuclear-armed North Korea late on Tuesday.

"There's not a fundamental reason why what we're seeing out of North Korea right now should affect stock market prices, but it's being used as the reason to sell off right now because we've been looking for it for so long", Schiegoleit said.

Investors retreated from several of this year's top performers on Thursday, including shares of large USA technology companies and biotechnology firms, while lifting shares of utilities companies - often thought of as bond proxies due to their relatively hefty dividends.

Selling was broad. Declining issues outnumbered advancing ones on the NYSE 6-to-1; on Nasdaq, a 3.60-to-1 ratio favored decliners.

Bobby Vanderhall, Hampstead Man Bludgeons Mother, Sister, Third Woman To Death
Police say he had been removed from the house with emotional issues twice previously and taken to a medical center. He is being held in Mineola and was scheduled for arraignment on Sunday.

Developments regarding the situation with North Korea may remain in focus next week, although traders are also likely to keep an eye on reports on retail sales, housing starts, and industrial production.

Six of the S&P 500 sectors ended higher.

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 average for new 52-week lows this year is about 230 per day. The slide deepened after Trump's remarks on North Korea. Shares of Macy's lost $2.36, or 10%, to $20.67, their lowest close since 2010.

Nvidia fell $7.37, or 4.3 percent, to $164.74, while Advanced Micro Devices gave up 71 cents, or 5.5 percent, to $12.12. Blue Apron has fallen 49% from its IPO price of $10 a share.

"There was some skittishness earlier but then some buyers stepped in", he said.

"It's hard to consider a lot of "what-ifs" before they happen", said Frank Cappelleri, executive director of brokerage Instinet.

Mr. Cappelleri said he would need to see more pullbacks of at least 1% before becoming anxious about the stock market. North Korea responded with threats to launch missiles into the Pacific Ocean near Guam, a USA territory.

The Korean won has depreciated against the dollar, down 1.5% this week.

Gold added $10.80, or 0.8 percent, to settle at $1,290.10 an ounce.

-Corrie Driebusch contributed to this article.

Related Articles