Tech Companies Leads Broad Slide in US Stocks; Oil Slumps

Why Did the S&P 500 NASDAQ and Dow Change Direction

Why Did the S&P 500 NASDAQ and Dow Change Direction

US stocks headed lower in early trading Wednesday, Aug. 9, 2017, as traders weighed the growing tensions between the USA and North Korea. The euro was last trading at $1.1733 and was also down on the day against the yen and the pound at 128.61 yen and 0.9023 pounds.

Efforts by the U.S. to dial down rhetoric have failed to shift the bearish mood among investors.

In an apparent response to Trump's tweet, a statement issued by North Korea's official KCNA news agency claimed the president is "driving the situation on the Korean peninsula to the brink of a nuclear war".

U.S. President Donald Trump escalated his rhetoric towards North Korea on Thursday, saying his earlier threat to potentially bring "fire and fury" down on the nation maybe "wasn't tough enough".

Wall Street stocks fell for the second straight session on Wednesday (Aug 9) as worries about US-North Korea tensions rattled investors.

'Traders are on red alert as the mention of war has sent them running for cover.

Hong Kong led the sell-off, slumping 2.04 per cent, while Shanghai slipped 1.63 per cent. Seoul shed 1.69 per cent, Jakarta fell 1.03 per cent, and The Straits Times Index lost 1.31 per cent. The major averages have slid firmly into negative territory, with the Dow and the S&P 500 pulling back further off Monday's record closing highs.

The CBOE Volatility Index - a measure of investors' expectations for swings in the S&P 500 over the next 30 days - surged 44% to 16.04 Thursday - its highest level since U.S. Election Day.

"There's a lot of unknowns out there; we're past the good news of earnings", he said.

"It's awesome when you consider the headlines just how calm the equity markets are, how they've taken things in their stride", said Ryan Detrick, senior market strategist at LPL Financial in Charlotte. The Russell 2000 index of smaller-company stocks gave up 13.20 points, or 0.9 percent, to 1,396.95.

Speculative positions in USA gold futures remain subdued, said UBS strategist Joni Teves. Germany's DAX fell 0.9 percent, while the CAC 40 in France lost 0.5 percent.

Gold rose 0.6% to $1,268 (£976) an ounce and platinum gained 0.6% to reach $972.95 an ounce, having hit its highest since April at $979.

On the currency markets, the pound was down to a three-week low against the United States dollar but mainly due to earlier disappointing output and trade data.

Japan is the world's biggest creditor country and there is an assumption that investors there will repatriate funds in a crisis.

Later on Friday, investors will look to US July consumer price data for hints on the Fed's policy outlook and near-term moves in the dollar.

Housebuilders Persimmon, Taylor Wimpey (LSE: TW.L - news) and Barratt fell by 2.8 to 3% on weak house price data.

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. The yield on the 10-year Treasury note fell to 2.23 percent from 2.26 percent late Tuesday.

At 5.00 a.m. ET, U.S. crude hovered around $49.40 per barrel, while Brent stood around $52.37.

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