Wall Street lower on US-North Korea tensions

Wall Street lower on US-North Korea tensions

NEW YORK, Aug 11 (Reuters) - Wall Street put a floor under global equities on Friday after a weak inflation reading brought investors back into US stocks even as tensions between the United States and North Korea continued to escalate, though the geopolitical fears still drove safe-haven buying of gold and the yen.

Trump continued to ramp up the rhetoric with a post on Twitter this morning indicating that the U.S.is prepared to take military action against North Korea.

The Nikkei slumped to its lowest close for nearly three months yesterday, leading an Asia-wide sell-off sparked by President Donald Trump's apocalyptic warning over North Korea's weapons programme.

At a briefing on opioid addiction at his golf course in Bedminster, New Jersey, Trump warned North Korea not to make any more threats against the United States, adding that North Korea would be "met with fire and fury like the world has never seen".

TECH SLIDE: Losses among technology stocks led the market slide. The Dow Jones industrial average slid 36.64 points, or 0.2 percent, to 22,048.70. The Russell 2000 index of smaller-company stocks gave up 4.02 points, or 0.3 percent, to 1,410.15.

LACKLUSTER QUARTER: Office Depot sank 22.4 percent after the office supply company's second-quarter results fell short of Wall Street's projections.

Nikkei was down by 1.29 percent while Indian stock market closed 0.68 percent lower.

The FTSE 100, which had been creeping towards record highs, closed down 0.6 per cent at 7,498.06.

USA stocks have rallied this year with few interruptions, something many investors have attributed to the improving health of US companies and steady global economic growth.

The dollar was down 0.77 percent against the yen JPY= at 109.21 yen.

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Although Japan could be in the front line of any clash with North Korea, the yen is benefitting because Japan is the world's biggest creditor nation and Japanese investors tend to repatriate funds in times of stress, attracting other flows.

Wall Street was expecting more inflation.

Equities slid, while US Treasuries and gold climbed, as US President Donald Trump's latest comments further inflamed tension with North Korea.

"We're not very oversold yet so the market still has more downside left to it", said Robert Pavlik, chief market strategist at Boston Private Wealth in NY. Euro Stoxx 50 index was down by 1.27 percent and CAC 40 lost 1.4 percent as investors turned cautious. US crude was unchanged at $48.59 per barrel and Brent was last at $51.84, down 1.63 percent on the day.

Asian equity markets extended a global slide on Friday, sending investors fleeing to less risky assets such the yen, the Swiss franc and US Treasuries.

Investor focus now turns to Friday's US consumer price index data.

The 30-year bond last rose 6/32 in price to yield 2.7847 percent, from 2.794 percent late on Thursday.

Meanwhile, gold demand in India remained sluggish this week as local prices jumped to their highest level in almost three months and a rally in global prices dampened fresh buying elsewhere in Asia.

Spot gold (XAU=) added 0.1 percent to $1,261.71 an ounce, pulling away from the previous session's two-week lows.

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