Wall Street falls as investors flee risk on N. Korea concerns

Wall Street falls as investors flee risk on N. Korea concerns

The Dow Jones Industrial Average (DJIA) managed to end its three-day losing streak today, even though tensions with North Korea seem to increase by the hour.

USA producer prices unexpectedly fell in July, pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

Fresenius Medical Care (NASDAQ: NXTM) announced a $2 billion agreement to acquire US medical technology company, NxStage Medical, Inc.

The Standard & Poor's 500 index fell less than a point to 2,474, making up much of the ground it lost earlier.

As impressive as that is, the Dow was only up about 400 points, or 1.8%, during its recent string of records.

The Stoxx Europe 600 benchmark was down 1% (http://www.marketwatch.com/story/european-stocks-face-worst-week-in-9-months-on-us-north-korea-tensions-2017-08-11), while Hong Kong's Hang Seng led the Asian losses with a drop of 2%.

The S&P/TSX Composite Index slipped 39.02 points to close Wednesday at 15,217.33.

And back home, the Australian share market closed lower yesterday: The S&P/ASX 200 Index closed 5 points down to finish at 5,761.

Apart from geopolitical worries, some technical analysts like Tom McClellan, editor of the McClellan Market Report, blamed seasonality for this week's retreat given August's record as a weak month for stocks.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize. Britain's FTSE 100 sank 1.4 percent.


Subdued U.S. inflation has stirred doubts about the chances of another Fed interest rate hike this year, which have weighed on the dollar.

"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year", said Sireen Harajli, FX strategist at Mizuho in NY.

The local index is still up 13.2 percent for the year. Against the yen, the euro last traded at 128.29 yen, down 0.2 percent.

Commodity bloc currencies are typically sensitive to swings in market mood and proved to be so against, with the Australian Dollar leading the way lower having been stung by disappointing consumer confidence data.

Gold futures prices GCZ7, +1.18% were up almost 1% to $1,273.80 per ounce.

The latest COT positioning data will be watched closely in late U.S. trading on Friday, although overall risk conditions are likely to remain the dominant short-term influence on gold prices.

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

Meanwhile on the domestic front, US initial jobless claims for the week ended July 29 exceeded consensus estimates (http://www.marketwatch.com/story/US-jobless-claims-rise-by-3000-to-244000-2017-08-10), recording 244,000 versus 240,000 expected this morning. Trump's comments came after a Washington Post report that North Korea has built a miniaturized nuclear warhead.

With Asian bourses and USA stock futures weakening early on Wednesday, the safe-haven 10-year Treasury yield was last down 3 basis points.

Related Articles