Dow plummets 205pts as Trump inflames Korea tension

US stocks close lower after President Trump's remarks to North Korea

US stocks close lower after President Trump's remarks to North Korea

NEW YORK, Aug 11 (Reuters) - Wall Street put a floor under global equities on Friday after a weak inflation reading brought investors back into US technology and other stocks, but gold and the yen still added slightly to the week's gains as tensions continued to escalate between North Korea and the United States.

Global markets have been on edge since Tuesday, when President Donald Trump warned North Korea of severe retribution should the authoritarian state proceed with any more missile tests or threats.

Trump followed his warning with a tweet on Wednesday about the strength of the American nuclear arsenal, but expressed hope it would not need to be used.

Gold - generally regarded as a safer asset in times of uncertainty - hit its highest price for more than two months on Friday, touching $1,288.97 an ounce at one point.

Housebuilders Persimmon and Barratt Developments were among the biggest gainers of the day, up 1.58% and 1.02% respectively.

USA markets held steady in trade on Friday, with the Dow Jones up 0.2%. The blue-chip index yesterday snapped its winning streak, and today is poised to halt its streak of record highs.

A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalization drop from a record high $61.36 trillion on Monday to $60.43 trillion at the close on Thursday.

"Geopolitics splashed cold water on the markets", said J.J. Kinahan, chief strategist at TD Ameritrade. The Dow is up 34.62 points or 0.2% at 21,878.63, the Nasdaq is up 25.62 points or 0.4% at 6,242.49 and the S&P 500 is up 4.36 points or 0.2% at 2,442.57.

Almost $1 trillion has been wiped out from global equity markets since tensions were sparked off by Trump's "fire and fury" comments on Tuesday.

USA trading volume has been low with summer setting in and Congress expected to be in recess until September 5.

"Despite all this, there's no reason to press the panic button". The Russell 2000 index of smaller-company stocks picked up 1.69 points, or 0.1 percent, to 1,374.23.

Despite the past week's decline, the major indexes are in positive territory so far this year, led by the Nasdaq, which is up 16.2 percent. Netflix was down 1.8 percent.

Hong Kong shed more than one percent and Shanghai also closed lower, while Seoul shares continued their sell-off after slumping Wednesday, with the won again softening.

Office Depot tumbled 22.4 percent after the office supplies retailer's quarterly results came in below estimates.

Advancing issues outnumbered decliners on the NYSE by 1,432 to 1,310.

The dollar index fell 0.3 percent, with the euro up 0.36 percent to $1.1812.

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