Stocks Close Modestly Lower After Trump Warns North Korea

Chelsea West
August 10, 2017

The Dow Jones was down 0.3% in opening trade, declining to 22,016.8 and the wider S&P 500 index dropped 0.48% to 2,463.18.

The financial index had risen earlier in the session after the Labor Department said US job openings, a measure of labor demand, jumped to a record high in June to the highest level since December 2000.

With U.S. President Donald Trump warning North Korea of "fire and fury", some investors have become concerned that the war of words between the two countries could escalate.

Other stock indexes also ended the day lower.

The tough talk came amid reports that North Korea had developed technology to miniaturize a nuclear warhead that could be placed in a intercontinental ballistic missile.

Burger chain Wendy's was up 4.20 percent after it reported better-than-expected quarterly profit and sales.

The Toronto Stock Exchange's S&P/TSX composite index was down 39.02 points to 15,217.33 in a broad-based decline that saw many sectors finish in the red while bullion stocks surged almost 1.9 per cent.

On the USA economic front, the Labor Department released a report showing labor productivity increased by slightly more than expected in the second quarter. The Nasdaq composite climbed 30 points, or 0.5 percent, to 6,414.

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The Labor Department also said unit labor costs rose by 0.6% in the second quarter following an upwardly revised 5.4% spike in the first quarter.

Unit labor costs had been expected to climb by 1.2 percent compared to the 2.2 percent jump that had been reported for the previous quarter.

Considerable weakness is also visible among tobacco stocks, as reflected by the 1.1% drop by the NYSE Arca Tobacco Index.

U.S. crude oil for September delivery fell 0.4% to $US49.17 a barrel, its third decline in four sessions.

Markets in Canada's largest centre were set to follow global markets lower on Wednesday as investors held back from betting on riskier assets amid escalating North Korea tensions. The Nasdaq was off 0.2 percent, to 6,370.46.

The major European markets have also shown notable moves to the downside on the day. The UK's FTSE 100 Index increased 0.1%, France's CAC 40 Index rose 0.2% and Germany's DAX Index added 0.3%. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.8 basis points at 2.225 percent.

Ten out of the 11 major S&P 500 sectors fell after the comments with the only gains seen in the utilities sector.

In the bond market, treasuries have moved sharply higher due to their appeal as a safe haven amid geopolitical tensions.

Other reports by TheSundaySentinel

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