Gold Beats US Stocks As North Korea Worries Drive Haven Demand

13 August, 2017, 13:56 | Author: Terri Saunders
  • Traders on the floor of the New York stock exchange after Donald Trump's US election victory 9 November 2016

They outweighed gains in health-care stocks and elsewhere. Utilities companies were down the most.

"It's been a bit of a roller coaster this week, with all the rhetoric between the U.S. and North Korea", said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management. Eastern time. The Dow Jones industrial average slid 120 points, or 0.5 percent, to 21,928.

The Nasdaq composite lost 18.13 points, or 0.3 percent, to 6,352.33.

Many Asian currencies struggled, with the Korean won heading for its sharpest fall in almost eight weeks. "Although it is considered highly unlikely that this tension will escalate into a nuclear war, the market still needs to see how President Trump will eventually deal with his advocating "fire and fury" against North Korea's threat", said Margaret Yang Yan, market analyst at CMC Markets Singapore.

Investor sentiment turned negative after North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the US Pacific territory of Guam in an unusually detailed threat.

There were fewer signs of anxiousness in the markets Friday.

Most large-cap stocks were mixed across the board. It's still the highest it's been since May. Panasonic was off 0.74 percent to sit at 1,475.5 yen.

Inflation has risen 1.7 percent over the past 12 months, suggesting that inflation pressures remain well under control. "Should we see another dip in inflation in July, it could make the job of building a consensus for another rate hike this year more hard". But some economists say the Fed may stand pat for the rest of 2017 unless inflation accelerates in coming months.

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.

Health-care stocks, which have been in a slump, posted gains. Perrigo rose $2.17, or 2.8%, to $79.01.

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Until then, Wall Street surprised by its low volatility, wrote on Tuesday.

US stocks closed slightly lower Wednesday, making up much of the ground they lost earlier following a rare batch of earnings disappointments by Walt Disney and other big companies. Gold miners bucked the 1.3 per cent fall for Australia's benchmark index.

After hurrying to sell off richly-valued stocks this week, investors appeared to be reassessing the geopolitical risks, according to Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. AES Corp. shed 26 cents, or 2.3%, to $11.12.

But then oil prices succumbed to the overall selling pressure for risky assets, aided by an OPEC report showing crude production by cartel members increased slightly in July, including Saudi Arabia, which had championed efforts by the organization and its allies to extend an output freeze. Brent crude, used to price worldwide oils, rose 20 cents to $52.10 a barrel in London.

The dollar slipped to as low as 109.11 yen in early Asian trade on Friday, its lowest level since June 14, when the greenback had fallen to as low as 108.81 yen. The euro fell to $1.1735 from $1.1752. Prices for bonds and gold headed higher.

Major stock indexes overseas didn't fare any better. Germany's DAX was up 0.1%, while France's CAC 40 fell 1.1%.

In the United Kingdom, the FTSE 100 closed down 0.59%, or 44.67 points, at 7498, broadly in line with negative trends in European markets.

A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalization drop from a record high $61.36 trillion on Monday to $60.43 trillion at the close on Thursday.

This article was originally published at 6:55 a.m.

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