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Stocks, Dollar, Extend Slide as USA, N. Korea Tensions Intensify

12 Août 2017

The Standard & Poor's 500 index fell 5.99 points, or 0.2 percent, to 2,474.92.

Despite the gains on the day, the major averages moved lower for the week.

"A global stock market fund will have its fair share of value and growth companies, unlike -say- the FTSE 100 index which is predominately value-orientated with its bias towards energy, mining and financial, or the Japanese TOPIX which is growth-orientated with a predominance of consumer goods companies".

The Labor Department is also expected to issue its Producer Price Index (PPI), which is likely to have remained unchanged at 0.1 percent in July.

After touching a more than two-month high, spot gold last added 0.1 percent to $1,287.18 an ounce. Price pressures have come in below estimates for the past four readings; economists are expecting a 0.2 percent rise month-on-month for the core measure.

Utilities closed up 0.3 percent while the materials sector was the S&P's biggest loser with a 0.9-percent drop.

US equities steepened their losses late in the session after President Donald Trump said his earlier warnings to North Korea may not have been tough enough.

Trump, whose threat this week to bring "fire and fury" was dismissed by North Korea, said Thursday that statement might not have been "tough enough". "Hopefully Kim Jong Un will find another path!" he tweeted.

"This situation is beginning to develop into this generation's Cuban Missile crisis moment, with recent leaked intelligence reports alleging that North Korea now has miniaturised its nuclear warheads, which extends the range of its missiles, and potentially brings USA targets into reach", ING's chief Asia economist Robert Carnell said in a research note on Friday.

SeaWorld Entertainment shares lost more than 6 percent.

Housebuilders Persimmon, Taylor Wimpey and Barratt fell by 2.8 to 3% on weak house price data. Only 3 of the 30 stocks in the Dow finished the day with a gain: IBM, Coca-Cola and McDonald's.

Stocks in the region suffered Thursday on rising geopolitical tensions, with the MSCI Asia Pacific Index hitting its lowest intraday level since July 28.

There were falls of almost 2% on South Korea's Kospi and Hong Kong's Hang Seng, with markets in mainland China and Australia also down - taking their cues from sharp losses on Wall Street earlier. The Japanese markets were closed for a holiday.

The Korean won KRW=KFTC also continued to skid, sliding 0.3 percent to 1,145 won to the dollar, after earlier sinking to its lowest level in a month.

Back in London Worldpay closed as another gainer in the FTSE 100, up 0.4%, after it agreed to a GBP9.30 billion takeover by United States rival Vantic after weeks of talks, in a deal which is set to create a GBP22.20 billion payments giant. Benchmark 10-year notes were last up 12/32 in price to yield 2.201 percent, from 2.242 percent late on Wednesday.

The North Korea situation isn't the only thing weighing on stocks.

The Federal Reserve is also scheduled to release the minutes of its latest monetary policy meeting, which may shed some light on the outlook for the interest rates.

Trump's remarks on Tuesday that North Korea would face "fire and fury like the world has never seen" pushed Wall Street lower on Tuesday and drove up the VIX "fear gauge" of expected volatility on the S&P 500 higher.

Stocks, Dollar, Extend Slide as USA, N. Korea Tensions Intensify