Stocks veer higher into record territory; oil heads lower

Paterniano Del Favero
Agosto 13, 2017

Investors' unease over escalating tensions between the US and North Korea had weighed on stocks earlier in the day, pushing gold and bond prices slightly higher. The Dow Jones industrial average slid 36.64 points, or 0.2 percent, to 22,048.70.

On Thursday, the CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the USA presidential election.

The S&P 500 closed just below the flat line at 2,474.02. The won declined as much as 0.8 per cent, falling to a three-week low, while the cost of insuring five-year South Korean sovereign bonds from non-payment climbed and the Kospi 200 volatility index jumped as much as 30 per cent.

At home, the Footsie rose marginally in the previous session, having added 10.79 points to end the session 0.14 percent higher at 7,542.73, finding support in strong energy shares, which helped offset a drop in InterContinental Hotels Group (LON:IHG) and Paddy Power Betfair (LON:PPB), whose results disappointed investors.

Japan said on Tuesday it was possible that North Korea had already developed nuclear warheads and warned of an acute threat posed by its weapons programs as Pyongyang's continues missile and nuclear tests in defiance of United Nations sanctions.

On Thursday, North Korea's military said it is considering a plan to fire four intermediate-range ballistic missiles around the US Pacific territory of Guam to "interdict the enemy forces on major military bases on Guam and to signal a crucial warning to the US". "I do think we could see markets pull back between 1 and 5 percent".

Meanwhile, markets in Japan, South Korea and other Asian countries were also lower, and so-called futures signaled that US markets would also open down.

The Russian dollar-traded index RTS was down 1.49 percent, and ruble-traded MICEX fell 1.29 percent by midday.

Computer hardware stocks rebounded following recent weakness, with the NYSE Arca Computer Hardware Index climbing by 1.4%.

The rouble, however, withstood the pressure thanks to global demand for Russia's still high-yielding bonds as well as monthly tax payments due from next week. The stock fell $169 to $1,879.98. Silver gained 47 cents, or 2.9 percent, to $16.86 an ounce. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.3 basis points to 2.189%.

The market indexes wavered between small gains and losses for much of the morning, then veered lower by afternoon.

Shares of SeaWorld Entertainment Inc. slid 6.2 percent after the theme park operator reported second-quarter revenue that fell short of Wall Street's expectations.

September-dated crude futures settled up 0.8%, or 39 cents, at $49.56 per barrel. Brent crude, used to price global oils, declined 29 cents to $51.61 per barrel in London. Copper fell 2 cents to $2.93 a pound.

The dollar fell to 109.85 yen from 110.48 yen late Tuesday.

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