S&P falls 1.4 pct in safety flight on N. Korea tensions

Dianna Christensen
August 14, 2017

Wall Street put a floor under global equities on Friday after a weak inflation reading brought investors back into US stocks even as tensions between the United States and North Korea continued to escalate, though that tension still drove safe-haven buying of gold and the yen.

Benchmark 10-year notes US10YT=RR were last up 12/32 in price to yield 2.201 percent, from 2.242 percent late on Wednesday.

The Dow slumped 204.69 points or 0.9 percent to 21,844.01, the Nasdaq plummeted 135.46 points or 2.1 percent to 6,216.87 and the S&P 500 tumbled 35.81 points or 1.5 percent to 2,438.21.

The yen on Friday added to a strong weekly rally against the dollar of close to 1.5 percent, hitting its highest versus the greenback in nearly four months, at 108.73 yen.

Other markets: Oil turned lower after the International Energy Agency said oil supply rose for a third month as compliance with an OPEC output deal faltered but prices have rebounded (http://www.marketwatch.com/story/oil-prices-head-lower-as-global-tensions-continue-unabated-2017-08-11) to edge up.

Major indexes in Europe closed mostly lower. It outlined detailed plans for a missile strike near USA territory Guam. US and British equivalents were also trading a touch above Wednesday's six-week lows.

Markets are now awaiting USA consumer price data for July, due later in the session.

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The dollar was up 0.05 percent to 109.25 yen JPY=, after earlier falling to a sixteen-week low following data showing US consumer prices rose less than expected in July. Market participants are looking to Friday's U.S. Consumer Price Index data. The yen appreciated against the USA dollar. The Nasdaq added 39.68 points, or 0.6 percent, to 6,256.56. The FTSE 100 ended 44.67 points lower at 7498.06. Wanda Hotel Development shares rose 19.8% after the unit of China conglomerate Dalian Wanda Group said it would buy assets worth more than 7 billion yuan ($1.05 billion) as part of a restructuring.

Donald Trump has issued another provocative warning to North Korea, suggesting that his threat to unleash "fire and fury" on the country was not "tough enough".

Crude futures, meanwhile, extended losses on fears of slowing demand and lingering concerns over global oversupply.

US crude CLc1 was unchanged at $48.59 per barrel and Brent LCOc1 was last at $51.84, down 1.63 percent on the day.

An Associated Press report that the US and North Korea have been engaged in back channel talks (https://apnews.com/686ac7c761694b28b67793a1d8297145?link=mktw) for several months even as they exchange incendiary threats may also help to soothe jitters. October Brent crude fell $0.80, or 1.5%, to $51.90 a barrel.

Tensions between the US and North Korea continued to simmer early Friday.

Emerging market stocks .MSCIEF lost 1.27 percent. Four that are controlled by Dhanin and his family - Charoen Pokphand Foods, CP All, Siam Makro and True Corp. - are ranked by analysts in the region's top 20 in terms of return potential over the next 12 months. The precious metal climbed 1.3 percent in the previous session, its biggest gain since mid-May, and touched $1,278.66 an ounce, it highest level since June 14.

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