European markets end lower amid geopolitical tensions

Paterniano Del Favero
Agosto 13, 2017

The modest rebound came at the end of a turbulent week on Wall Street as escalating tensions between the US and North Korea rattled global markets. Indexes were up for their first day in four. Early Friday, the ICE Dollar Index was up just 0.04% to 93.437.

Nasdaq 100 e-minis were down 17 points, or 0.29 percent, on volume of 36,232 contracts.

The blue-chip index plunged 204.69 points, or 0.9%, to close at 21,844.01.

The recovery fit a recent pattern of investors using dips to put more money in stocks.

The technology sector .splrct was the biggest weight on the S&P 500 index with a 1.9-percent drop. The S&P 500 is up 9 per cent, while the Dow is up 10.6 per cent.

"While it appears that Pyongyang's detailed strike plan against Guam has created a sour backdrop to trading, it's worth noting that US/North Korea tensions aren't having quite the same effect on the DAX and CAC", said Spreadex analyst Connor Campbell.

FIRE AND FURY: Keeping up his tough talk, Trump told reporters that Kim Jong Un's government should "get their act together" or face extraordinary trouble, and suggested his earlier threat to unleash "fire and fury" on North Korea was too mild.

President Donald Trump said on Twitter that the United States' nuclear arsenal was now "more powerful than ever before" in a fresh warning to North Korea over its missile tests.

Markets recovered slightly Friday. Gold was last up 1.4 percent, its highest point since mid-June, while the Swiss franc and the Japanese yen rose. It's still the highest it's been since May.

"Given the great run we've had, seems like some sort of pullback wouldn't be surprising", said Michael Baele, managing director of investments at U.S. Bank Private Wealth Management. Both are voting members this year on the Fed's rate-setting committee. They suggest the US and China, a North Korean ally, could work together to de-escalate the situation. Lam Research Corp. climbed $4.82, or 3.2 per cent, to $154.26. The company also said sales at its established stores declined for the fourth straight quarter.

Belgian drugmaker Galapagos was a rare bright spot, finishing up 4.8 per cent as brokers upgraded their view on the stock which also outperformed on Thursday after a successful drug trial.

OIL: Benchmark U.S. crude lost 12 cents to $48.47 per barrel on the on the New York Mercantile Exchange. Brent crude, used to price worldwide oils, rose 20 cents to $52.10 a barrel in London.

Banks also fell 1.6 percent, with the sector posting its worst week in nine months. The euro rose to $1.1824 from $1.1774.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, was at its highest in more than a month.

In Asia, several indexes closed lower overnight. Australia's S&P/ASX 200 dropped 1.1 percent to 5,696.80.

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