Markets extend losses as Korea tensions escalate

U.S. President Donald Trump on Thursday warned Pyongyang again, saying his previous promise to unleash “fire and fury” may not have been strong enough after North Korea responded with a threat to fire missiles over Japan to land near the U.S. Pacific territory of Guam.

WALL STREET: Losses in health care and consumer-focused companies pulled US stocks lower, snapping a 10-day winning streak for the Dow Jones industrial average. “That reset is being triggered by North Korea geopolitical concern and stretched valuations”, said Peter Kenny, senior market strategist at Global Markets Advisory Group in NY.

Gains among technology companies helped snap a three-day losing streak for USA stocks Friday, though the market ended with its worst weekly loss since March.

The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.0 percent to C$93.36, and Manulife Financial Corp falling 2.8 percent to C$24.93.

Wall St’s three major indexes ended the day down with the Dow Jones Industrial Average down 0.15 per cent, while the S&P 500 lost 0.24 per cent and the Nasdaq Composite losing 0.21 per cent.

Shares of Snap were off about 15 percent premarket following the social media company’s earnings that came below estimates and a slew of price target cuts.

Energy stocks retreated 0.5 percent, despite higher oil prices.

“Trump’s comments about North Korea have created nervousness and the fear is if the president really means what he said “fire and fury”.

Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, said: “While the tough talk about the potential for war (between the U.S. and North Korea) is scary, investors have heard it many times before”. The Dow is up 34.62 points or 0.2% at 21,878.63, the Nasdaq is up 25.62 points or 0.4% at 6,242.49 and the S&P 500 is up 4.36 points or 0.2% at 2,442.57.

Elsewhere, French conglomerate Vivendi saw its stock fall 2.1 percent in the morning hours, while Italy’s Mediaset dropped only 0.3 percent.

J.C. Penney sank 16.6 percent after the struggling department store chain reported quarterly results that fell short of Wall Street’s expectations. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2 basis points at 2.192%.

Dow e-minis were down 24 points, or 0.11 percent, with 22,166 contracts changing hands.

Avis Budget Group slumped 9.9% after the auto rental company cut its guidance following a weak second quarter.

The Canadian dollar was trading at 78.64 cents USA, down from an average price of 78.71 cents United States on Wednesday.

CURRENCY: The dollar declined to 109.79 yen from Tuesday’s 110.34 yen. It declined 23 cents on Tuesday to $52.14. The euro rose to $1.1812 from $1.1774.