S&P falls 1.4 pct in safety flight on N. Korea tensions

Markets Right Now: Stocks drift lower on Wall Street

Stocks are lower at midday as investors weighed the growing tensions between the USA and North Korea.

After North Korea claimed Trump is "driving" the Korean peninsula to the "brink of a nuclear war", the president responded with a tweet suggesting the USA is prepared to take military action against the communist nation.

Buying interest may be somewhat subdued, however, as the ever-escalating war of words between President Donald Trump and North Korea continues to raise geopolitical concerns. In a note to investors, Paul Christopher, head global market strategist, and Tracie McMillion, head of global asset allocation, suggest, "the threat of a nuclear weapon is certainly more serious than previous threats, but that threat also may increase the probability of a diplomatic solution". The Japanese markets were closed for a holiday.

Global stock markets ended their worst week in months amid rising tensions between the USA and North Korea, though US stock indexes steadied on Friday to close up slightly.

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".

"We would now be careful with a whiff of risk aversion in the air and, by extension, also stay away from shorts in the rates market", RBC's global macro strategist Peter Schaffrik said.

The dollar also slipped 0.26 percent lower against the yen to 110.01 yen.

When Iraq invaded Kuwait 27 years ago this month, the S&P 500 fell 1.1 percent, and was down 9.3 percent 20 days later.

Gold prices were up almost 1% (http://www.marketwatch.com/story/gold-gains-about-1-as-us-north-korea-tensions-grow-2017-08-09) to $1,273.30 an ounce.

North Korea talk drags stocks lower; gold, yen rise
The reclusive state raised the stakes further with a detailed plan to send a salvo of missiles towards the U.S. territory of Guam. Declining issues outnumbered advancing ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq , a 2.47-to-1 ratio favoured decliners.

The strength in the sector came amid a jump in the price of gold.

Currency traders consolidated positions in the Japanese yen and Swiss franc, and pushed up the dollar index by unwinding some of the recent bets on the euro.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories.

U.S. producer prices Thursday disappointed, as traders await consumer price inflation figures later Friday. The Nasdaq composite lost 0.3 percent to 6,352.33.

High-flying technology names suffered outsized losses on the day, with Apple falling 3.2 percent, Amazon 2.6 percent and Facebook 2.2 percent. But for the week the S&P 500 lost 1.3 percent, its worst weekly showing since March.

Shares of staffing firm Adecco slumped 6.4 percent after its results.

"Both (PPI measures) were well below consensus and give us no hope that consumer price inflation is going to materially beat expectations", said Chris Weston, chief market strategist at IG Markets.

Australian stock futures dropped 1.2 percent and New Zealand stocks slid 1.1 percent.

Australia's S&P/ASX 200 edged up 0.2 percent to 5,779.20, while South Korea's Kospi fell 1.1 percent to 2,342.19. Watch maker Fossil Group plunged 25 percent after reporting a weak quarter.

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