USA stocks snap 3-day losing streak in roller coaster week

Chelsea West
August 14, 2017

CURRENCIES: The euro slipped 0.1 percent to $1.1176 while the dollar was steady at 109.20 yen.

The Dow slumped 204.69 points or 0.9 percent to 21,844.01, the Nasdaq plummeted 135.46 points or 2.1 percent to 6,216.87 and the S&P 500 tumbled 35.81 points or 1.5 percent to 2,438.21.

Amid the hot rhetoric, US stocks sold off sharply on Thursday, with the S&P 500 falling more than 1 percent.

In the latest economic data, the consumer-price index (http://www.marketwatch.com/story/us-consumer-inflation-remains-soft-in-july-cpi-shows-2017-08-11) rose a seasonally adjusted 0.1% in July, its fifth straight month of softness, raising more questions about whether inflation will eventually rise to hit the Federal Reserve's 2% annual rate target.

Rising geopolitical tensions were heightened further when U.S. President Donald Trump warned Pyongyang it should be "very, very nervous" if it even thinks about attacking the United States or its allies, after Pyongyang said it was making plans to fire missiles over Japan to land near the U.S. Pacific territory of Guam.

While the data gave investors appetite for growth sectors such as information technology and biotechnology it soured them to rate-sensitive stocks such as banks, said Keith Lerner, chief market strategist, SunTrust Advisory services in Atlanta.

The pan-European FTSEurofirst 300 index.FTEU3 lost 1.11 percent.

Russian Foreign Minister Sergei Lavrov said on Friday the risks of a military conflict over North Korea's nuclear program are very high, and Moscow is deeply anxious by the mutual threats being traded by Washington and Pyongyang.

Many markets have recently climbed to record or multi-year highs, leaving them vulnerable to a sell-off. According to the Associated Press, South Korea's Kospi lost 1.7 percent, while Hong Kong's Hang Seng slid 2 percent.

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"The escalation of the geopolitical situation between the US and North Korea is beginning to rattle investors' nerves as was witnessed in the VIX index yesterday", said Peter Cardillo, chief market economist at First Standard Financial. On the Nasdaq, 1 378 issues rose and 892 fell. The yen appreciated against the USA dollar.

In bond markets, the yield on U.S. Treasuries fell, also pressured by the lowered expectations for a Fed move.

"Today's inflation data put the Fed on pause and really diminishes the fact that there's still some noise going around with the North Korea-U.S. situation", said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. USA wholesale prices declined in July for the first time in nearly a year.

The 30-year bond US30YT=RR last rose 28/32 in price to yield 2.7759 percent, from 2.818 percent late on Wednesday.

Crude futures extended losses on fears of slowing demand and lingering concerns over a global oversupply.

Spot gold XAU= added 0.7 percent to $1,286.00 an ounce.

ENERGY: Benchmark U.S. crude lost 15 cents to $49.02 per barrel in electronic trading on the New York Mercantile Exchange.

While the Russell 2000 index ended up 0.1 per cent on the day, it was more than 5 per cent below its July 25 record close and for the week it fell 2.7 per cent, its biggest weekly drop since February 2016.

Other reports by TheSundaySentinel

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