Stocks plunge amid growing North Korean-US tensions, gold continues rise

Stocks plunge amid growing North Korean-US tensions, gold continues rise

The rhetoric, which began late Tuesday and continued into Friday, cracked the calm that has enveloped the market for months and interrupted stocks' march higher.

Despite the drop, analysts said the market seemed to be a bit skeptical that the North Korea situation would grow into a major crisis, noting that the losses were still not that deep. Prices for bonds and gold headed higher.

The S&P 500 lost 9.74 points, or 0.39 per cent, to 2,465.18. The Dow Jones industrial average lost 0.15 percent, with the tech-heavy Nasdaq composite index declining 0.21 percent. The Russell 2000 index of smaller-company stocks gave up 10 points, or 0.8 percent, to 1,399.

Simmering tensions between the USA and North Korea continued to weigh on investors.

"Heightened geopolitical risks overnight have seen the markets flip from risk-on to risk-off and we have to wait and see how long this move runs before adding some positions", said Viraj Patel, an FX strategist at ING in London. "I have a feeling that by the end of the week, we'll feel this was just another blip on the radar".

The Walt Disney Co. dropped 3.9 percent, its biggest single-day loss in more than a year, after the media giant reported a weak quarter and said it would pull its movies from Netflix and start two of its own video streaming services.

The data comes amid tepid inflation that has remained below the Fed's 2 percent target, despite low unemployment. The stock was the biggest gainer in the S&P 500, rising $8.02 to $45.25.

France's CAC dropped 1.6 per cent and Germany's DAX fell 1.3 per cent. Rival TripAdvisor also slumped after its latest quarterly report showed that online and transaction revenue growth fell sharply. Macy's slumped 10 percent after reporting its 10th straight decline in a key sales measure. The company booked a hefty charge and said its CFO is leaving. The stock lost $2.80 to $9.04.

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United States stocks deepened their losses following the latest Trump comments, and the S&P 500 volatility index, known unofficially as the "fear index", rose decisively. Humana Inc. rose $4.74, or 1.9 percent, to $254.96. Major indexes in Asia closed lower.

Manulife Financial Corp was down 1.1 percent to C$25.64.

A weaker-than-expected July consumer price data also supported the recovery.

The Nasdaq is down 134.69 points, or 2.1 percent.

METALS: Gold, a traditional safe haven play, was moving higher. The Nasdaq is on track for a weekly loss of 1.5%, its worst since June. Silver gained 14 cents to $16.39 an ounce.

Benchmark U.S. crude added 39 cents to settle at $49.56 a barrel on the New York Mercantile Exchange.

The Japanese yen strengthened by 0.5 per cent to around 109.70 per dollar.

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.

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