Wall Street reels under North Korea tensions, tepid retail earnings

Stocks in Taiwan, Singapore and other Southeast Asian countries were also lower.

The S&P 500 index had its biggest one-day drop in nearly three months on Thursday as investors fled riskier assets, with technology stocks leading the charge, in response to an increasingly aggressive exchange of threats between the United States and North Korea.

In New York, the Dow Jones industrial average plunged 204.69 points to 21,844.01.

While the Russell 2000 index ended up 0.1 percent on the day, it was more than 5 percent below its July 25 record close and for the week it fell 2.7 percent, its biggest weekly drop since February 2016. An in-line print may not be enough to meaningfully rattle the Treasury market, however, which saw 10-year yields crack 2.20 percent on Thursday for the first time since June as part of a flight to safety.

ASIA’S DAY: Earlier, Asia bore the brunt of the mounting geopolitical uncertainty, with South Korea’s Kospi index closing down 1.7 percent at 2,319.71 and Hong Kong’s Hang Seng ending 2 percent lower at 26,883.51.

Trump turns up the heat on North Korea, geopolitical tensions fuel tech tumult in US stocks, and good news is bad news for oil.

Priceline Group toppled 8% after reporting a strong beat with its second-quarter results, but lowering its third-quarter earnings guidance to below the consensus number. Financials .SPSY fell the most, down about 1 percent. Retail stocks have taken a hit this year, with the SPDR S&P Retail ETF dropping 6.2 percent in the period as investors fear further market gains from Amazon.com.

But the S&P Bank sub-sector.SPXBK fell 0.7 percent on dimming prospects of another rate hike this year since higher rates tend to boost bank profits.

All four of the big-tech FANG stocks opened sharply lower. Its shares slid $9.77, or 5.3 percent, to $174.02.

The big economic news of the day will come after Asian markets have moved on to the weekend, however, with the release of USA consumer price index inflation data for July. On the Nasdaq, 1,846 issues fell and 953 advanced favoring decliners. The September copper contract was down two cents to US$2.91 a pound.

CURRENCIES: The euro slipped 0.1 percent to $1.1176 while the dollar was steady at 109.20 yen. “In this type of environment, bad news tends to send the market lower”.

Strong earnings this season have helped bolster global markets and the economy should grow in the second half of the year, said William Delwiche, managing director and investment strategist at Baird. Wholesale inventories are expected to climb by 0.6 percent. China’s Shanghai Composite followed suit with a 0.4% retreat, after the latest consumer prices index for the country rose less than expected, and the producer price index met forecasts. Economists had expected productivity to increase by 0.7 percent.