Gold steady near two-months highs as North Korea tensions lend support

Dow winning streak snapped as stocks drift lower

S&P 500 futures are down 0.24%, Nasdaq futures are down 0.27%, and Dow 30 futures are down 0.15%.

President Donald Trump's warning North Korea faced "fire and fury" and Pyongyang's threat of possible retaliation drove investors out of stocks on Wednesday and into the yen, Swiss franc, gold and government debt.

Japanese markets were closed for a holiday but the yen powered on, hitting an eight-week high of 108.91 yen to the USA dollar, adding to its biggest weekly gain since May.

The Swiss franc, the other traditional currency safety-play, has benefited too.

LACKLUSTER QUARTER: Office Depot sank 24.5 percent after the office supply company's second-quarter results fell short of Wall Street's projections. This week has been its biggest rise since June 2016. The Nasdaq composite lost 96 points, or 1.5 percent, to 6,256.

Concern over simmering geopolitical tensions sent Europe's stock markets down for a third day after President Trump stepped up his war of words with North Korea but by late afternoon opportunistic buyers had begun to return on Wall Street.

The CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the election.

The Chicago Board Options Exchange's Volatility Index, considered one of the best gauges of fear in the market, hit its highest level since May on Thursday.


The Standard & Poor's 500 index lost 35.81 points, or 1.4 percent, to 2,438.21.

"The comments by the Secretary of State is a message that nothing important has been decided on North Korea", Haruki Kawaguchi, a manager in the stock trading department at Marusan Securities, told Bloomberg News.

Stocks ended more than one percent down in Seoul while the won slumped to a three-week low against the dollar as the United States president and South Korea's volatile neighbour dramatically ramped up their war of words. "Pretty remarkable, perhaps even extraordinary, considering", said fund manager BlueBay strategist Tim Ash. The U.S. currency was down 0.3 percent at 109.94 yen, following a retreat to 109.740, its weakest since June 15.

Hours later, North Korea responded by saying it is seriously considering a missile strike on the Pacific island of Guam, home to a USA military base.

"This situation is beginning to develop into this generation's Cuban Missile crisis moment", ING's chief Asia economist Robert Carnell wrote in a note.

The Australian dollar, which rose to a 19-month high near 90.00 yen late in July, was down 0.6 percent at 86.77 yen after slipping to a one-month low of 86.23 yen. Netflix also fell, giving up $4.37, or 2.4 percent, to $174.

Oil prices rose nearly half a percent in today's trading following a bigger-than-expected drop in USA crude inventories. Elsewhere, the German Dax has opened down 0.80%, France's CAC40 index is down 0.87%, and the Euro Stoxx 50 is down 0.81%.

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