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Global stocks slide as US-North Korea nuclear tensions rise

13 August 2017

'With little else to go on the global markets couldn't help but focus on Trump's North Korean "fire and fury",' said Connor Campbell, analyst at Spreadex. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman were all up, with the Dow Jones U.S. defense index up 1.48 percent at 409.58.

While markets shrugged off news earlier in the day that North Korea had developed nuclear warheads, Trump's threatening reaction later in the day prompted a more nervous reaction from investors.

Investors also drew some encouragement from new government data showing US inflation at the consumer level inched higher last month.

Shares of Snap were off about 15 percent premarket following the social media company's earnings that came below estimates and a slew of price target cuts. The Shanghai Composite Index lost 0.2 percent to 3,275.57 and Hong Kong's Hang Seng was off 0.3 percent at 27,757.09. "That reset is being triggered by North Korea geopolitical concern and stretched valuations", said Peter Kenny, senior market strategist at Global Markets Advisory Group in NY.

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.

The Dow slid as declines in shares of Apple and those of Goldman Sachs, recently down 2.3 percent and 1.7 percent respectively, outweighed gains in shares of McDonald's and those of Coca-Cola, recently up 1.4 percent and 0.5 percent respectively. Travel-review website operator TripAdvisor was down 2.7 percent. The company also said sales at its established stores declined for the fourth straight quarter.

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Traders sold off financial stocks amid speculation the Fed will decide to hold off on raising interest rates next month.

Investors opted for the perceived safety of US Treasuries, which pushed the yield on the 10-year note three basis points lower to 2.21 percent.

Semafo jumped 10.3 percent to C$2.99 after Credit Suisse raised its recommendation on the gold miner to "outperform" from "neutral" following its second-quarter results, and Finning International Inc rose 6.9 percent to C$27.63 after the heavy equipment company reported quarterly earnings that beat expectations and raised its dividend.

The dollar slipped to 109.04 yen from 109.26 late Thursday. The S&P hasn't moved more than 0.5 percent in one day since July and has fallen more than 1 percent only twice this year.

The selling was also in response to lower prices in Asia and Europe.

Benchmark U.S. crude rose 23 cents to settle at $48.82 a barrel on the on the New York Mercantile Exchange. London's FTSE 100 shed 0.8 percent to 7,481.30. The euro edged down to $1.1727 from $1.1751. Japan was closed on a public holiday.

Global stocks slide as US-North Korea nuclear tensions rise