TSX hits 1-month low on N. Korea tensions, lower oil prices

A floor trader monitors share prices during afternoon trading at the Hong Kong Stock Exchange in Hong Kong China
A floor trader monitors share prices during afternoon trading at the Hong Kong Stock Exchange in Hong Kong China
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12 August, 2017

The U.S. Dow Jones stock index descended 0.93% to 21,844.01 points, S&P 500 decreased by 1.45% to 2,738.21 points and NASDAQ declined by 2.13% to 6,216.87 points.

Japan said on Tuesday it was possible that North Korea had already developed nuclear warheads and warned of an acute threat posed by its weapons programs as Pyongyang's continues missile and nuclear tests in defiance of United Nations sanctions.

It also outlined detailed plans for a missile strike near Guam, which is more than 3,000 km (2,000 miles) to the southeast of North Korea and home to about 163,000 people, a U.S. Navy base that includes a submarine squadron and an air base.

Dow e-minis were up 6 points, or 0.03 percent, with 29,187 contracts changing hands at 8:34 a.m. ET (1234 GMT).

Late Tuesday, President Trump warned North Korea about facing "fire and fury" if North Korea delivers more threats against the U.S.

The S&P 500 has hadn't a single day move of more than 0.5 percent since mid-July and has fallen more than 1 percent only twice this year.

In overseas trading, stock markets across the Asia-Pacific region saw further downside during trading on Thursday.

The remarks followed a new report asserting that US intelligence has assessed that Pyongyang has successfully produced a nuclear warhead that can fit inside its missiles.

"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 market indexes wavered between small gains and losses for much of the morning, then veered lower by afternoon. The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market, hit a one-month high before trading around 11.7.

The slide deepened after Trump's remarks on North Korea aired.

Beyond geopolitical concerns, investors continued to size up company earnings reports.

USA trading volume has been low with summer setting in and Congress expected to be in recess until September 5.

Disney dropped 4.5 percent after reporting a weak quarter and saying it would pull its movies from Netflix and start two of its own video streaming services.

Nasdaq 100 e-minis were down 1 points, or 0.02 percent, on volume of 49,062 contracts.

S&P 500 e-minis were up 1.5 points, or 0.06 percent, with 300,073 contracts traded.

Data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week. Core prices had been expected to rise by 0.2%.


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