Stock Futures Lower as North Korea Threatens US in Guam

Stock Futures Lower as North Korea Threatens US in Guam

Stock Futures Lower as North Korea Threatens US in Guam

London's FTSE 100 dipped by about 90 points, or more than 1%, in morning trading on Friday, adding to a slump of more than 100 points the day before and taking it to its lowest level since May.

The broad-based S&P 500 fell 0.4 percent to 2,466.18, while the tech-rich Nasdaq Composite Index tumbled 0.8 percent to 6,320.72.

Global stock markets ended their worst week in months amid rising tensions between the USA and North Korea, though US stock indexes steadied on Friday to close up slightly.

US Defence Secretary Jim Mattis, who often has emphasised the devastating costs of any conflict with North Korea, seemed to back up Trump's tone.

He has now gone further, saying the warning may not have been tough enough and that if North Korea did what it had threatened, it faced "an event the likes of which nobody's seen before".

French leader urges calm in North Korea crisis
North Korea responded by saying it was considering a plan to attack Guam and dismissed Trump's warnings as a "load of nonsense". Tensions around the Korean Peninsula started to rise in light of the implementation of the North Korean missile program.

"They've been doing this to our country for a long time, for many years, and it's about time that somebody stuck up for the people of this country and for the people of other countries", Trump said.

South Korea's KOSPI fell 1.7 per cent on Friday to its lowest since May 24, but its losses for the week were a relatively modest 3.2 per cent. Australia's S&P/ASX 200 edged down almost 0.1 percent. Economists had expected another 0.1% uptick.

Bond prices were little changed.

A separate report from the Labor Department showed an unexpected uptick in initial jobless claims in the week ended August 5th. Investors welcomed new data showing USA inflation at the consumer level inched higher last month, suggesting that the Federal Reserve may be less likely to raise interest rates next month. The stock lost $2.81 to $9.03.

Heading into Thursday, some 89 percent of the companies in the S&P 500 had reported quarterly results.

S&P falls 1.4 pct in safety flight on N. Korea tensions
Shares of Kohl's were down 8.4%, while Macy's fell 4% after the department store operators reported a fall in sales. It is now on track for its biggest weekly drop since the week before the November 8 US presidential election.

Apple (AAPL.O) pared gains after rising as much as 1.91 percent to an all-time high and provided the biggest boost to all three indexes, while healthcare stocks such as Johnson & Johnson (JNJ.N) were the biggest weight on the S&P. The strength in the sector came as gold for December delivery jumped USD10.80 to USD1,290.10 an ounce.

The top-flight also sank lower as a number of stocks went ex-dividend, a process where new buyers no longer qualify for the latest dividend payment.

The pound was up 0.3% against the euro at 1.1091 and down nearly 0.1% on the dollar at 1.2994.

The major European markets also saw continued weakness on the day. "If we were threatened, the USA would take action and there'd be a Treasury rally", said Battle. The yield on the 10-year Treasury note fell to 2.23 percent from 2.26 percent late Tuesday.

On the earnings front, News Corp.

Gold steady near 2-mth highs as N. Korea tensions continue
It has been the leading S&P gainer so far this year, making it particularly vulnerable to a decline. This morning gold had reached $1,286.33 while gold for delivery in December rose 0.8% to $1,290.10.

"However, if the rhetoric does ramp up, even without actual nuclear follow through, this could spook the market and make it hard for stock indices to rally into late summer due to the fears for global trade and global growth".

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