Stocks Regain Ground But Still Close Lower For The Week

Stocks Regain Ground But Still Close Lower For The Week

Global markets have lost almost US$1 trillion since USA president Donald Trump said on Tuesday that North Korea "will be met with fire and fury like the world has never seen" and then dialed up his warning further on Thursday by saying he wasn't tough enough this week.

"The level which we are looking at now is $1,300". 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.

Traders reacted with dismay to his fresh warning Thursday that his earlier threat to unleash "fire and fury" on the reclusive nuclear-armed state may not have been "tough enough".

With Japanese markets closed for a public holiday, Hong Kong led the downward charge in Asia-Pacific as the Hang Seng lost more than two percent.

"There is a low probability that we will have a war with North Korea", he said, and a larger pullback in stocks is "a buyable drop".

Shares of Snapchat parent Snap Inc.(SNAP) slid 14% a day after the company's earnings missed forecasts (http://www.marketwatch.com/story/snap-ceos-promise-cant-overcome-declining-ad-rates-stock-heads-toward-new-lows-after-earnings-2017-08-10), and the social-messaging company disclosed that average ad prices fell in the second quarter.

Trump continued the back-and-forth with a post on Twitter this morning indicating that the United States is prepared to take military action against North Korea.

"Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay.

Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea proved to be the trigger.

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 there will repatriate funds should a crisis materialize.

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The dollar was up 0.05 percent to 109.25 yen, after earlier falling to a sixteen-week low following data showing US consumer prices rose less than expected in July.

Copper traded at $2.912, down 0.25%, while natural gas tacked on 0.23% to $2.991.

The downbeat inflation data added to growing expectations the Federal Reserve may abandon its plan to hike rates later this year, after the central bank left its benchmark rate unchanged in June, citing concerns over the stuttering pace of inflation.

Sterling was last trading at $1.3013, up 0.30 percent on the day.

The dollar slipped to 109.04 yen from 109.26 late Thursday. The S&P 500 added 3.11 points, or 0.1%, to 2441.32, ending the week down 1.4%, its biggest loss since March.

"There are four more (inflation) prints between now and the December FOMC meeting and we expect the Fed to remain data-dependent, if a touch more cautious", TD Securities said in a research note.

Spot gold was up 0.1% at $1,287 per ounce by 2.17pm GMT, set for its biggest weekly gain since April.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories. Yields fall when bond prices rise.

USA crude rose 0.41 per cent to US$48.79 per barrel and Brent was last at US$52.01, up 0.21 per cent.

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