Dow plummets 205pts as Trump inflames Korea tension

Dow plummets 205pts as Trump inflames Korea tension

Dow plummets 205pts as Trump inflames Korea tension

Aug 11 (Reuters) - U.S. stocks were modestly higher in late morning trading on Friday as investors cautiously dipped back into riskier assets, after a three-day losing streak on concerns over escalating tensions between the United States and North Korea.

Euro zone stocks and blue-chips also dropped 0.9 per cent, while the miner-heavy FTSE fell 1.1 per cent to 7,309.96. The CBOE Volatility Index, the market's fear gauge, hit a nine-month high after sinking to an all-time low in late July. A batch of disappointing company earnings also helped pull the market lower, with consumer-focused companies and technology stocks among the biggest decliners.

Analysts said media and entertainment stocks also seemed to get caught up in the broader market drop, but emphasized it was often hard to isolate reasons behind specific stocks' movements. The Dow slumped by 1.1%, while the Nasdaq and the S&P 500 tumbled by 1.5% and 1.4%, respectively.

Titled "Reckless game over the Korean Peninsula runs risk of real war", the editorial suggested China will stay neutral if North Korea strikes first, but will intervene if the U.S.is the first mover.

Overnight, the MSCI Asia Pacific Index excluding Japan lost 1.6 percent as tensions rose.

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Specifically, North Korea hinted at a possible missile strike on USA -controlled Guam, following President Trump's "fire and fury" comments yesterday.

However, bank stocks, including Goldman Sachs, Bank of America and Morgan Stanley, were down about 1 percent on the dimming prospects of another rate hike this year.

The Labor Department said on Friday its Consumer Price Index edged up 0.1% in July, which was below the 0.2% rise expected by economists polled by Reuters.

Away from geopolitics, Graham Bishop, investment director at Heartwood Investment Management, said price action overall has been muted when companies have beat estimates in the latest reporting period, but then "altogether painful" when they miss.

The blue-chip CSI300 index fell 1.85 per cent, to 3,647.35 points. The major indexes were coming off their biggest single-day decline since May 17. The stock fell $166 to $1,882.94.

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Spot gold added 1.3 percent to $1,277.15 an ounce.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories, leaving prices volatile.

OIL: Benchmark U.S. crude lost 24 cents to $48.37 per barrel on the on the New York Mercantile Exchange while Brent crude, used to price worldwide oils, declined 20 cents to $51.70 per barrel in London.

The bond market was without direction: the yield of u.s. Treasury bills to 10 years, which evolves to the inverse of the bond price, appears to 2,190 %, compared to 2,198 % Thursday evening, and that bills to 30 years at 2,786 %, compared to 2,773 %.

The overall financials group, which accounts for roughly a third of the index slipped 0.9 percent. Silver also rose, gaining 38 cents, or 2.3 percent, to $16.77 an ounce.

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Trump's campaign-rally denunciations of China collide with the complexities of a codependent geopolitical relationship. They were not authorized to publicly discuss the private call, and spoke on condition of anonymity.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis take place.

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