Wall St falls on ramp-up of United States tension with N. Korea

Investors flocked to gold Wednesday against the backdrop of rising tensions between the USA and North Korea, offsetting some of the broad-based declines on the commodity-heavy Toronto stock index.

The governor of Guam has urged calm amid fears that North Korea is considering carrying out missile strikes on the United States territory.

Japan had said on Tuesday it was possible that North Korea had already developed nuclear warheads and warned of an acute threat posed by its weapons programmes as Pyongyang's continues missile and nuclear tests in defiance of United Nations sanctions. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman were all up, with the Dow Jones U.S. defense index up 1.48 percent at 409.58. Consumer-focused companies and banks were among the biggest decliners.

The major European markets also saw continued weakness on the day.

North Korea has previously warned the USA it has missiles capable of hitting major cities including Chicago and Denver.

Ten out of the 11 major S&P 500 sectors ended lower after the comments with the only gains seen in the utilities sector, which is seen as a bond proxy because of its slow but predictable growth and dividends. Netflix also fell, giving up $3.19, or 1.8 percent, to $175.17.

The Dow Jones Industrial Average was down 82.37 points, or 0.37 percent, to 22,002.97, the S&P 500 had lost 8.34 points, or 0.34 percent, to 2,466.58 and the Nasdaq Composite had dropped 38.99 points, or 0.61 percent, to 6,331.47.


Net income dropped to $US18 million in the second quarter, down from $US33 million in the same quarter a year earlier, the company said in a statement.

About 6.22 billion shares changed hands on U.S. stock exchanges, slightly above the 6.15 billion average for the last 20 sessions. However, strength in the Health Care and Materials sectors limited the losses. Gold was last up 1.4 percent, its highest point since mid-June, while the Swiss franc and the Japanese yen rose. Gold settled up 1.4% at $1,256.40 an ounce, then rose almost 2% - to almost $1,283 - after Wednesday's settlement.

The Nasdaq is up 0.77 points, or 0.01 percent. Core prices had been expected to rise by 0.2 percent.

Significant weakness is also visible among semiconductor stocks, as reflected by the 2.2 percent loss being posted by the Philadelphia Semiconductor Index. While the French CAC 40 Index fell by 0.6 percent, the German DAX Index slumped by 1.1 percent and the U.K.'s FTSE 100 Index plunged by 1.4 percent.

Japan's benchmark Nikkei 225 inched down less than 0.1 percent to finish at 19,729.74. The yield on the 10-year Treasury note fell to 2.23 percent from 2.26 percent late Tuesday.

ENERGY: Benchmark U.S. crude gained 28 cents to $49.84 a barrel in electronic trading on the New York Mercantile Exchange. The euro fell to $1.1728 from $1.1757. The department store also reaffirmed its full-year sales and earnings guidance, and plans to launch a new loyalty program and marketing strategy in the fall to improve sales.

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