United States stocks tumble on North Korea worries

Paterniano Del Favero
Agosto 13, 2017

The Dow Jones Industrial Average fell 0.9% to end at 21,844.01, the only close below 22,000 since breaking through that level for the first time August 2.

The Nasdaq Composite .IXIC was up 34.61 points, or 0.56 percent, at 6,251.48.

The escalation provided an excuse for a selloff many investors consider overdue, some investors and analysts said.

The data comes amid tepid inflation that has remained below the Fed's 2 percent target, despite low unemployment. "I think a few investors are in the process of surrender", one can read in a text to The canadian Press. Is that a reason to be?

USA stocks were modestly higher in late morning trading on Friday as investors cautiously dipped back into riskier assets, after a three-day losing streak on concerns over escalating tensions between the United States and North Korea.

Investors have been jittery about North Korea since Tuesday when Trump said any threats from Pyongyang would be "met with fire and fury like the world has never seen".

For the week, the Dow is on track to fall 0.9%, its biggest one-week drop since April.

Selling was broad. Declining issues outnumbered advancing ones on the NYSE 6-to-1; on Nasdaq, a 3.60-to-1 ratio favored decliners. It is now on track for its biggest weekly drop since the week before the November 8 USA presidential election. Both the Nasdaq and the Russell are set for their third straight weekly decline.

In overseas trading, stock markets across the Asia-Pacific region saw continued weakness during trading on Friday.

The headlines about North Korea served as a spark to jolt investors out of complacency on the heels of an extended period of calm in the market, said McClellan who shared the following chart in a report.

Outside the political arena, declines in a pair of technology stocks added to the cautious tone on the day.

Economic data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while separate figures showed the number of Americans filing for unemployment benefits unexpectedly rose last week. Some say expectations for its server-chip business were just too high (http://www.marketwatch.com/story/nvidia-stock-could-pause-as-server-growth-slows-down-2017-08-10).

The U.S. equity market is hovering near record levels and volume has been tepid following the onset of summer. The fact that ended with a 1%-plus drop, however, might be good news. To Reuters citing Peter Kenny, in charge of the market strategy in Global Markets Advisory Group, " market participants are looking for any reason for a reset of course. North Korea has since threatened to launch missiles at the USA territory of Guam, and the country previously threatened "all-out war, wiping out all the strongholds of enemies, including the US mainland".

"If the USA and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so", the editorial's authors said.

Following the sell-off seen in the previous session, stocks are regaining some ground during trading on Friday.

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