U.S. stocks fall again on North Korea tensions

Bruno Cirelli
Agosto 13, 2017

The Dow Jones Industrial Average rose 14.31 points (0.07 per cent) to 21,858.32.

The Nasdaq Composite Index climbed 39.68 points, or 0.6%, to close at 6,256.56. Is that a reason to be?

USA stocks rose Friday but still notched their biggest weekly loss in months, as investors were shaken by disappointing earnings results and an escalation of threats between the US and North Korea.

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

For the week, the Dow is down 1.1%, its biggest one-week drop since November.

Smaller-company stocks also fell sharply. But for the week the S&P 500 lost 1.3 percent, its worst weekly showing since March.

As is often the case, Wall Street was treated to volatility in August, the stock market's most turbulent month.

Seoul shares hit 11-week low amid selling by foreign investors following Trump's fresh warning to North Korea. Major U.S. indices had posted record highs in recent weeks.

USA government bonds strengthened Friday as soft inflation data led investors to further scale back expectations for interest-rate increases from the Federal Reserve.

Minneapolis Fed President Neel Kashkari, who has advocated for the Fed to halt interest rate hikes until inflation picks up gain, on Friday said his colleagues are telling each other "a ghost story (http://www.marketwatch.com/story/feds-kashkari-says-central-banks-hawks-are-spooked-by-ghost-story-of-higher-wages-2017-08-11)" about higher wage inflation that scared them into raising short-term rates.

Plus, Macy's spiking call volume; Hertz's big day; and a continued slide from TRIP stock.

The CBOE Volatility Index - a measure of investors' expectations for swings in the S&P 500 over the next 30 days - surged Thursday to its highest level since U.S. Election Day.

Australian shares fell to near three-week lows in a broad-based selloff.

The biotech stock expected to double.

In contrast to the US market, global equities remained weak. Hong Kong's Hang Seng Index plunged by 2 percent, while South Korea's Kospi Index slumped by 1.7 percent.

An editorial in China's state-run Global Times (http://www.globaltimes.cn/content/1060791.shtml), published late Thursday local time, added to the pressure on Asian markets. North Korea responded with threats to launch missiles into the Pacific Ocean near Guam, a USA territory. They suggest the USA and China, a North Korean ally, could work together to de-escalate the situation.

J C Penney became the latest retailer to suffer the consequences of weak earnings, diving 16.6 per cent after reporting a US$62 million loss in the second quarter.

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