Wall Street Records Losses After Trump's North Korea Warning

  • Wall Street Records Losses After Trump's North Korea Warning

Wall Street Records Losses After Trump's North Korea Warning

On Thursday, New York Fed President William Dudley said he expects sluggish USA inflation to rise over the next several months while the hot labor market gets even hotter.

The franc wasn't the only beneficiary to the risk-off sentiment sweeping markets.

There is keen anxiety in the marketplace after U.S. President Donald Trump on Tuesday warned North Korea there would be "fire and fury like the world has never seen" if the Asian nation keeps threatening the U.S. North Korea responded by saying it may fire a missile toward the U.S. territory of Guam.

The Standard & Poor's 500 index fell 5.99 points, or 0.2 percent, to 2,474.92.

Amid broad based weakness on Wall Street, biotechnology stocks turned in some of the market's worst performances on the day. The move added to escalating U.S.

But while investors appeared to favor safe-haven assets, some bargain seekers helped Wall Street's three major indexes pare losses and some USA officials sought to dial back tensions. The Nasdaq composite lost 68 points, or 1.1 percent, to 6,284.

Data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week.

Energy stocks also fell along with the price of crude oil.

Pyongyang responded with threats to launch preemptive military strikes against the USA, including targeting the Pacific island territory of Guam. Spot gold was 0.1 percent lower at $1,276.78 an ounce after having spiked the previous day to a near two-month peak of $1,278.66.

Disney dropped 3.9 percent, its biggest single-day loss in more than a year, after the media giant reported a weak quarter and said it would pull its movies from Netflix and start two of its own video streaming services.

In Europe, Germany's DAX fell 1.1 percent, while France's CAC 40 slid 1.4 percent.

US crude rose 0.69 percent to $49.51 per barrel and Brent was last at $52.66, up 1 percent on the day. It is still the best performing G10 currency so far this year with gains of more than 11 percent against the dollar. "U.S. equities managed to cut its losses towards yesterday's close and while the VIX (volatility index) did pop higher, it still remains at an overall low level".

CURRENCY: The dollar declined to 109.77 yen from Tuesday's 110.34. Brent crude, used to price worldwide oils, gained 10 cents to $52.24 in London.

Meanwhile, gold stocks bucked the downtrend, driving the NYSE Arca Gold Bugs Index up by 1.3 percent.

While North Korea is likely to remain in focus, a report on consumer price inflation may also attract attention on Friday, with consumer prices expected to rise by 0.2 percent in July.