Markets extend losses as Korea tensions escalate

GETTYGold prices have jumped amid North Korea war fears

TECH SLIDE: Losses among technology stocks led the market slide.

Reuters data show a 22 per cent perceived chance for a rate increase after the Fed's December meeting. "North Korea responding with a threat to US territory after Trump warned them not to threaten the USA was never going to go down well", Lawler said.

"Military solutions are now fully in place, locked and loaded, should North Korea act unwisely".

North Korea had responded to Trump's previous promise to unleash "fire and fury" with a threat to land missiles near the US Pacific territory of Guam.

Some of the top performing gold and gold mining stocks also rose on the back of the heightened US and North Korean tensions.

"Sound dialogue is not possible" with President Donald Trump they said.

The Nasdaq composite lost 18 points, or 0.3 percent, to 6,352.

Spot gold was almost flat at $1,285.76 per ounce at 0447 GMT and was set for a weekly gain of over 2 percent.

The Standard & Poor's 500 index fell 20 points, or 0.8 percent, to 2,453 as of 10:09 a.m. "Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay.


"Traders should closely watch global equities today, with further falls and risk aversion likely pumping more safe-haven flows into precious metals", said Jeffrey Halley, a senior market analyst at OANDA.

The North Korea situation isn't the only thing weighing on stocks.

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.

World stocks fell for a third day on Thursday and investors shifted assets into safe haven currencies the Swiss franc and yen as well as gold. Economists had expected prices to rise by 0.2%.

Reaction to new inflation data was muted.

"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year", said Sireen Harajli, FX strategist at Mizuho in NY. As well, producer prices in Japan rose 0.3% on month in July, a tick higher than the 0.2% gain seen and at a 2.6% gain on year, also beating expectations.

"Where the current tensions escalate sharply, we would expect an acceleration of this week's price action, i.e. a sharp rise in risk premiums across asset classes, substantial falls in United States and German government bonds yields, significant JPY and CHF strength and a massive sell-off in equities, particularly in Europe which is more linked into the global cycle".

The euro dipped 0.1 percent to $1.1737 EUR= but the single European currency has been slipping this week against the dollar, having hit a more than 2 1/2-year high of $1.1892 on August 2. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman all rose and the Dow Jones U.S. defense index was up 1.6 percent after hitting a record high.

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