Shares, dollar slip as US-North Korea tensions escalate

A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York U.S

A trader works on the floor of the New York Stock Exchange shortly after the opening bell in New York U.S

US equities steepened their losses late in the session after President Donald Trump said his earlier warnings to North Korea may not have been tough enough.

The Dow Jones Industrial Average fell 36.64 points, or 0.17 percent, to end at 22,048.7, the S&P 500 lost 0.9 point, or 0.04 percent, to 2,474.02 and the Nasdaq Composite dropped 18.13 points, or 0.28 percent, to 6,352.33.

Wall Street stocks fell for the second straight session Wednesday as worries about US-North Korea tensions rattled investors.

The Standard & Poor's 500 index dropped 35.81 points, or 1.4 percent, to 2,438.21.

Palladium fell 0.2 percent to $895.30 per ounce.

Simmering tensions between the USA and North Korea have come back to the boil in recent days after Pyongyang disclosed plans to fire missiles over Japan to land near America's Pacific territory of Guam.

Early in the day, North Korea revealed a detailed plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, a major military hub and home to U.S. bombers.

United States dairy group Dean Foods dropped nearly 21 percent as its quarterly earnings fell, and the stock received a downgrade from JPMorgan.

"Heightened geopolitical risks overnight have seen the markets flip from risk-on to risk-off and we have to wait and see how long this move runs before adding some positions", said Viraj Patel, an FX strategist at ING in London.

Priceline Group slid 6.9 percent after the online travel booking service issued a profit forecast that was weaker than analysts were expecting.

Heidelberger Druckmaschinen soared 8.85 percent after its first-quarter loss narrowed to 16 million euros from last year's 37 million euros, due to lower financing costs.

The broader Topix dropped 0.2 percent to 1،615.56.

Energy stocks retreated 0.5 percent, despite higher oil prices.

In a note sent to clients late on Thursday, the US bank predicted the single currency would rise to $1.25 in the first quarter of next year and reach parity with sterling for the first time. South Korea's KOSPI fell 1.8 percent to almost a three-month low.

Benchmark U.S. crude rose 23 cents to settle at $48.82 a barrel on the on the New York Mercantile Exchange.

In oil, Brent crude was dragged 0.5% lower at 52.46 U.S. dollars a barrel despite Opec forecasting increased demand for oil next year. Hong Kong's Hang Seng dipped 1.6 percent to 27,314.74. Since the European Union referendum, exporters have benefited from the poor sterling exchange rate flattering their prices and boosting margins, but not so in June, where export volumes fell by close to 1%.

Raytheon, which manufactures Tomahawk cruise missiles jumped +2.57% while other defense contractors such as Lockheed Martin (+1.71%), Northrop Grumman (+1.22%) and L3 Tech (+1.99%) also saw gains.

The dollar was down 0.53% against the yen at 109.48 yen, after briefly dropping as low as 109.53.

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