Global stocks selloff stops at Wall Street; gold, yen tick up

Stock markets nosedived Thursday as investors continued moving into gold amid escalating political tensions between the United States and North Korea.

Cracks are showing in what has been a virtually non-stop US equity rally after a rapid escalation of tension between North Korea and the United States this week. The Russell 2000 index gave up 24.40 points, or 1.7 percent, to 1,372.54.

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.

The technology sector.SPLRCT was the S&P's biggest drag with a 2.2 percent drop.

"This selloff could be more than just a North Korea induced blip on the screen", Peter Boockvar, chief market analyst at The Lindsey Group, wrote in a report on Friday.

"It looks like it was used as a good excuse to adjust positions", he said, referring to the latest flare-up of tensions between the United States and North Korea.

The DAX of Germany dropped 1.12 percent and the CAC 40 of France fell 1.40 percent.


Silver gained 47 cents, or 2.9 percent, to $16.86 an ounce.

"Excluding a war variable, KOSPI's support level will be in the low 2,300-point range, but it could be broken should worries about a possible war on the Korean Peninsular deepen", Cape Investment & Securities analyst Kim Yu-gyeom said.

Gold extended gains after data showed US producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

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. "We believe the recent recovery should run out of steam once the USA dollar regains strength", said Norbert Rücker, Julius Baer's head of Macro & Commodity research. The euro was last trading at $1.1733 and was also down on the day against the yen and the pound at 128.61 yen and 0.9023 pounds. Kohl's said net income for the second quarter was $208 million, or $1.24 per share, versus $140 million, or 77 cents per share, in the same period a year ago.

Despite its recent weakening, the New Zealand dollar is still up more than 5 percent this year, setting a 26-month high of $0.7557 in July. Brent crude, used to price worldwide oils, slid 80 cents, or 1.5 percent, to $51.90.

Against the Swiss franc, it fared slightly better and was broadly flat on the day at 1.1319 francs per euro. The Dow shed 0.2 percent. Others anxious about lofty market valuations and pockets of weakness like the mounting red ink at JCPenney and Snap, both of which crashed to record lows on Friday.

The Russell 2000 is up 15.41 points, or 1.1 percent. Earlier in Asia, Japan's benchmark Nikkei 225 slipped less than 0.1 percent, while Hong Kong's Hang Seng slid 1.1 percent.

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