Stocks Make Comeback, but Haven't Fully Recovered From North Korea Selloff

Judith Bessette
Agosto 13, 2017

Investors had their eye on company earnings and the latest developments in the ongoing tensions between North Korea and the United States.

The Standard & Poor's 500 index slipped 0.90 points, or 0.04 percent, to 2,474.02. Eastern time. The Dow Jones industrial average added 20 points, or 0.1 percent, to 21,865.

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

The pound was unchanged against the dollar at $1.2981 and up 0.15% against the euro at 1.1040 euros.

"The escalation of the geopolitical situation between the US and North Korea is beginning to rattle investors' nerves as was witnessed in the VIX index yesterday", said Peter Cardillo, chief market economist at First Standard Financial.

The sabre-rattling - sparked when President Donald Trump stunned the world with an apocalyptic warning to unleash "fire and fury" on North Korea - continued Thursday as Pyongyang mocked the U.S. leader as "bereft of reason".

Almost $1 trillion has been wiped out from global equity markets since Trump's vow on Tuesday to unleash "fire and fury" on North Korea if it threatens the United States.

Overseas investors pulled a net $232.9 million from South Korea's equities market Friday, trimming its year-to-date inflows to $7.6 billion, according to data compiled by Bloomberg using official figures. It's still the highest it's been since May.

Investors are also wagering that the Federal Reserve will hold off a rise in rates given the soft inflation data for July released by Labor Department on Friday of a modest 0.1% increase.

But the yen added to an already-strong weekly rally of close to 1.5 percent, hitting its highest in nearly four months versus the dollar at 108.73 yen. The Fed, which raised its key interest rate in March and June, has signaled it plans a third rate hike before the end of this year. But some economists say the Fed may stand pat for the rest of 2017 unless inflation accelerates in coming months.

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UP WITH TECH: Investors bid up technology sector shares. KLA-Tencor gained $2.52, or 2.9 percent, to $90.07, while Seagate Technology added 97 cents, or 3.1 percent, to $32.53.

Significant strength was also visible among software stocks, as reflected by the 1.2% gain posted by the Dow Jones Software Index. Lam Research Corp. climbed $4.82, or 3.2 percent, to $154.26.

Shares of Macy's tumbled 10.2 percent and Kohl's was down 6 percent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnaround may still be a long way off. For its part, the canadian dollar traded at an average price of 78,83 US¢, up 16 cents compared to its average price of the previous day.

SLIDING: Traders sold-off utilities stocks. Regions Financial shed 23 cents, or 1.6 percent, to $14.07.

Benchmark U.S. crude rose 23 cents to settle at $48.82 a barrel on the on the New York Mercantile Exchange. Brent crude, used to price worldwide oils, was down 35 cents to $51.55 a barrel in London.

But losses soon resumed, with Tokyo edging down as the Nikkei again came under pressure from the strength of the safe-haven yen, which hit eight-week highs Wednesday against the dollar. Netflix also fell, giving up $2.58, or 1.4 percent, to $175.78.

BONDS: Bond prices fell.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, ended at a session low of 11.11 after rising as high as 12.63.

While the Russell 2000 index ended up 0.1 percent on the day, it was more than 5 percent below its July 25 record and for the week it fell 2.7 percent, its biggest weekly drop since February a year ago.

Sterling was last trading at $1.3009, up 0.27 percent on the day. The index is bouncing off its lowest closing level in six months.

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