USA stocks fall as North Korea worries rise

USA stocks fall as North Korea worries rise

Stocks in Canada's largest market were set to follow global markets lower on Thursday as investors sought refuge in safe-haven assets following exchange of more threats between the United States and North Korea.

The Dow Jones Industrial Average fell 0.9 percent to end at 21,844.01, the only close below 22,000 since breaking through that level for the first time August 2. The Standard & Poor's 500 index dropped 1.4 percent to 2,438.21. The FTSE 100 of the United Kingdom declined 0.59 percent and the SMI of Switzerland finished lower by 1.48 percent.

Equities slid overnight as tension continued to escalate, with US President Donald Trump threatening that if the North Korean regime "does anything" to the US or a US ally "things will happen to them like they never thought possible", after Pyongyang announced its plan to fire four missiles near the US territory of Guam.

A Chinese state-run newspaper said on Friday that China should make clear that it will stay neutral if North Korea launches an attack that threatens the United States, but that if the USA attacks first and tries to overthrow North Korea's government, China will prevent it doing so.

After pushing to fresh 2-month highs after weaker than expected US CPI data, gold prices edged lower with some hopes for diplomatic moves to ease North Korean tensions.

With the tense mood pushing European shares down for a third day and Wall Street set to fall again, global stocks were on course for their worst week since Trump won November's US presidential election.

The VIX rose further on Wednesday, rising as far as 12.11, its highest in nearly a month.

The Swiss franc USDCHF, -0.8829% bought $1.0382 on Wednesday, representing a 1.2% rise from $1.0266 late Tuesday in NY.

The euro bought $1.1739, compared with $1.1760 late Wednesday in NY.

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Frankfurt's DAX 30 was 0.4 per cent lower at 11,961.60 points. Against the yen, the euro last traded at 128.29 yen, down 0.2 percent. The Shanghai Composite Index lost 0.2 per cent to 3,275.57 and Hong Kong's Hang Seng was off 0.3 per cent at 27,757.09.

Instead, investors turned to assets that tend to benefit in times of geopolitical and financial stress.

Foreign investors have been cashing in gains in tech stocks since July following a recent bull run of the local stock market. Consumer-focused companies and banks were among the biggest decliners.

The Russell 2000 is up 15.41 points, or 1.1 percent. The dollar was last up 0.3% at 0.9660 francs, while the euro was trading marginally higher at 1.1339 francs. Netflix lost 1.5 per cent.

Yields on core government debt fell.

South Korea's KOSPI .KS11 fell 1.7 percent on Friday to its lowest since May 24, but its losses for the week were a relatively modest 3.2 percent.

"There's not a fundamental reason why what we're seeing out of North Korea right now should affect stock market prices, but it's being used as the reason to sell off right now because we've been looking for it for so long", Schiegoleit said.

Flight to safety has helped lift the Japanese yen and gold prices, after North Korean leader Kim Jong Un made an explicit threat on Wednesday to strike a US military base in Guam.

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