Published: Sun, August 13, 2017
Markets | By Lucia Cruz

Markets slide, dollar slumps as North Korea fears spike

Markets slide, dollar slumps as North Korea fears spike

Stocks around the world fell sharply on Thursday and investors moved into the yen, gold and other safe-haven assets amid more aggressive talk between the United States and North Korea.

The three major US indices have sold off this week amid investors' jitters after Trump said on Tuesday that threats from Pyongyang would be "met with fire and fury like the world has never seen".

The Russian dollar-traded index RTS was down 1.49 percent, and ruble-traded MICEX fell 1.29 percent by midday. The Dow slumped 204.69 points or 0.9% to 21,844.01, the Nasdaq plummeted 135.46 points or 2.1% to 6,216.87 and the S&P 500 tumbled 35.81 points or 1.5% to 2,438.21.

"I think (the North Korea situation) is going to continue to provide a little bit of support, but not enough to push prices significantly higher from here", said Hynes.

"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. Discovery Communications fell 70 cents, or 2.9 percent, to $23.60. Small-company stocks fell more than the rest of the market.

Gold extended gains after data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

Macy's (M.N) shares closed down 10.2 percent and Kohl's (KSS.N) fell nearly 6 percent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off.

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The war of words between Washington and Pyongyang saw the price of gold rise to $1,278.49 this morning with future gold for December delivery up 1.3% at $1,279.30.

The Dow Jones Industrial Average rose 14.31 points to close at 21,858.32.

The market jitters gave investors an opportunity to pocket some of their recent gains following a string of record highs fueled by strong corporate earnings. The FTSE 100 of the United Kingdom declined 0.59 percent and the SMI of Switzerland finished lower by 1.48 percent. Economic growth doubled to 2.6% during the second quarter.

Uncertainty over North Korea also reverberated in the foreign exchange market, where safe-haven currencies such as the Japanese yen and Swiss franc rallied.

The greenback also came under pressure after New York Federal Reserve President William Dudley cautioned it would "take some time" for USA inflation to reach the bank's two percent target, the latest warning price pressures remain muted. The stock lost $142.20 to $1,906.80.

Japan's benchmark Nikkei 225 slipped 0.2 percent to 19,705.96. The euro edged down to $1.1727 from $1.1751. Gold extended its gains into a third day, hitting a 9-week high of $1287.73 an ounce. The Shanghai Composite Index lost 0.2 per cent to 3,275.57 and Hong Kong's Hang Seng was off 0.3 per cent at 27,757.09.

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