Published: Fri, August 11, 2017
Worldwide | By Gretchen Simon

Dow plummets 205pts as Trump inflames Korea tension

Dow plummets 205pts as Trump inflames Korea tension

Trump's remarks on Tuesday that North Korea would face "fire and fury like the world has never seen" weighed on Wall Street and drove up the VIX "fear gauge" .VIX , or the cost of protection against a drop in the S&P 500.

The last time the S&P closed down more than 1 per cent was May 17 when it fell 1.8 per cent.

SIMMERING TENSIONS: North Korea revealed on Thursday a detailed plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, a major military hub and home to U.S. bombers.

"The day North Korea decides to attack the United States or any neighbor would be the last day of the North Korean regime and the last day of Kim Jong Un's life", Rubio said in Jacksonville. "The global economy is really on some firm footing", he said. Eastern time. The Dow Jones industrial average slid 120 points, or 0.5 percent, to 21,928.

The dollar strengthened against the Swiss franc on Thursday, buying 0.9642 franc compared to 0.9636 franc late Wednesday in NY.

The dollar index, which tracks the greenback against six rival currencies, was down 0.12 percent to 93.53, after rising as high as 93.888 earlier in the session.

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.

"We would now be careful with a whiff of risk aversion in the air and, by extension, also stay away from shorts in the rates market", RBC's global macro strategist Peter Schaffrik said.

ENERGY: Benchmark U.S. crude added 28 cents to $49.45 per barrel in electronic trading on the New York Mercantile Exchange.

The Swiss franc rose 0.01 per cent versus the greenback, the most since late June, at 0.96 per dollar.

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The US producer prices data was slightly below consensus forecasts with both headline and core prices declining 0.1% on the month.

The dollar was steady at 110.030 yen after going as low as 109.560 overnight, its weakest in eight weeks. Japan is the world's biggest creditor country and there is an assumption investors there will repatriate funds in a crisis.

"U.S. markets had previously been becalmed amidst the Goldilocks scenario of strong profit growth, low interest rates and full valuations".

Blue Apron slumped as much as 19.1 percent to a record low after the meal-kit delivery service provider reported a bigger-than-expected loss in its first quarterly report as a public company.

The benchmark US yield on Thursday was just above 2.2 percent, at its lowest level since late June, as investors bought up Treasuries, a classic safe harbor. The 30-year Treasury bond rose 27/32 in price to yield 2.8252 per cent, from 2.867 per cent late on Tuesday.

He said that North Korea "can be very very nervous" if it acts on either the United States or its allies, and warned that "things will happen to them like they never thought possible".

Oil prices rose after a report showed U.S. refineries processed record amounts of crude in the latest week, eating into inventories.

US crude CLc1 was unchanged at $48.59 per barrel and Brent LCOc1 was last at $51.84, down 1.63 percent on the day. That's the index's lowest level in two months.

The price of gold also surged for the second day in a row as the December bullion contract advanced US$10.80 to US$1,290.10 an ounce.

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