Wall St set to open lower as tensions with N.Korea mount

Bruno Cirelli
Agosto 11, 2017

The dollar's weakness in early Tokyo trading also stemmed from a report of North Korea's state-run Korean Central News Agency that the country is carefully considering making missile strikes on areas around the U.S. Pacific territory of Guam, market sources said.

The benchmark S&P 500 index tumbled more than 1 percent on Thursday, only the third time this year it has fallen that much, while the Nasdaq shed more than 2 percent.

European shares were also lower following reports that a auto had rammed a group of soldiers in Paris, injuring six before speeding off in what officials identified as a suspected terrorist attack.

Currency markets focused on the USA producer price index data due later in the session.

NORTH KOREA: President Donald Trump warned North Korea of "fire and fury" this week in response to recent threats from Pyongyang, which said it was examining plans for attacking Guam, a US territory in the Pacific with a military base. The yield on USA 10-year Treasurys slid to 2.191% Friday from 2.211% Thursday.

All 11 major S&P sectors were lower and the consumer discretionary index .splrcd was the biggest loser with a 1 percent drop. Its shares slid $9.77, or 5.3 percent, to $174.02.

The tech-heavy Nasdaq composite bore the brunt of the sell-off, losing 135.46 points, or 2.1 percent, to 6,216.87. The Dow Jones industrial average slid 204.69 points, or 0.9 percent, to 21,844.01, just shy of its low point for the day.

On the currency markets, the pound was down to a three-week low against the U.S. dollar but mainly due to earlier disappointing output and trade data.

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. Dillard's slumped 15.5 percent after the chain booked a loss for the second quarter as increased inventory led to big discounts.

The Federal Reserve's hint about unwinding balance sheets, the possibility of the European Central Bank tapering stimulus and the looming debate about the USA debt ceiling in the fall challenge the market's recent performance, Mr. Baele said. It added 39 cents to $49.56 a barrel overnight. Brent crude, the worldwide standard, lost 23 cents to $52.14 a barrel in London. The yield on the 10-year Treasury note slipped to 2.21 percent from 2.25 percent late Wednesday. Heating oil fell 1 cent to $1.63 a gallon. The September copper contract was down two cents to US$2.91 a pound.

The U.S. dollar fell to 110.48 yen from 110.72 yen late Monday. The mood then hit Europe, where Frankfurt's DAX dropped 1.1% and the CAC-40 in Paris fell 1.4%. South Korea's Kospi fell 0.2 percent. Preliminary Unit Labor Costs, the annualized change in the price businesses pay for labor, came in below expectations at 0.6%, below the 1.1% forecast. Earlier in Asia, Japan's benchmark Nikkei 225 slipped less than 0.1 percent, while Hong Kong's Hang Seng slid 1.1 percent. Australia's S&P/ASX 200 edged down almost 0.1 percent.

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