Dow plummets 205pts as Trump inflames Korea tension

14 August, 2017, 06:44 | Author: Leticia Walters
  • People are reflected on an electronic board showing Japan's Nikkei average outside a brokerage at a business district in Tokyo

The Dow Jones Industrial Average fell 162.59 points, or 0.74 percent, to 21,886.11, the S&P 500 lost 30.54 points, or 1.23 percent, to 2,443.48 and the Nasdaq Composite dropped 116.67 points, or 1.84 percent, to 6,235.66.

By the end of the day almost $1 trillion in equity had been lost globally.

Those highs were supported by strong corporate earnings, but lofty market valuations and a prolonged period without a significant market pullback had some analysts predicting a sell-off.

A small rise in a measure of US consumer prices pointed to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year, which would be favorable to equity investors.

"If we break above this downtrend, then we potentially open up the region up to $1,300, the recent highs we saw in April and June", Butler said.

In Europe, Britain's FTSE100 was down over one percent, Germany's DAX traded 0.5 percent lower, while the French CAC40 index was 0.62 percent in the red, as of 9:00am GMT.

Stocks took a hit for a third straight day Thursday as North Korea's nuclear threats seemed again to roil the markets.

Robert Phipps, a director at Per Stirling Capital Management in Austin, said he was reassured after Dallas Fed President Rob Kaplan said the Fed needs evidence of progress toward its inflation goal before raising rates.

President Donald Trump kept the heat on North Korea, warning that the U.S. military is "locked and loaded" in the event of a misstep by the totalitarian state.

The North's latest threat came as US President Donald Trump warned Tuesday that North Korea will be met with "fire and fury" should it stick to ambitions to hit the US with ballistic missiles.

July's 0.1 percent increase in consumer prices suggests that the Federal Reserve may be less likely to raise interest rates next month. The stock lost 78 cents to $3.93. Discovery Communications declined 2.9%, while Viacom shed 1.9%. The company also said sales at its established stores declined for the fourth straight quarter. Humana Inc. rose $4.74, or 1.9 percent, to $254.96.

Elsewhere in commodities, the September crude contract advanced 20 cents to $49.76 per barrel and the September natural gas contract was up seven cents to $2.95 per mmBTU.

The Canadian dollar edged down 0.20 cents to 78.73 USA cents, while oil prices gained 39 cents to 49.56 US dollars a barrel and gold prices increased 19.10 to 1,281.70 USA dollars an ounce. Brent crude, used to price worldwide oils, rose 20 cents to $52.10 a barrel in London.

Gold added $3.90 to settle at $1,294 an ounce. It announced earnings of 92 cents per share on revenue of $2.23bn.

CURRENCIES: The dollar slipped to 109.05 yen from 109.20 while the euro weakened to $1.1763 from $1.1773.

Japan is the world's biggest creditor nation and there is an assumption Japanese investors may repatriate their foreign holdings in times of heightened global uncertainty.

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