Markets extend losses as Korea tensions escalate

An exhibit at the Korean War Memorial Museum in Seoul

An index of 15 gold miners tracked by Bloomberg Intelligence climbed 1.1 percent, led by Toronto-based Yamana Gold Inc. It slid 80 cents, or 1.5 percent, to close at $51.90 per barrel on Thursday.

The Nasdaq composite lost 18.13 points, or 0.3 percent, to 6,352.33. "The North Korea situation appears to be the culprit". However, strength in the Health Care and Materials sectors limited the losses.

December Comex Gold futures rose on Thursday for a third straight day, hitting a two-month high as investors continued to react to an additional exchange of threats by the United States and North Korea.

Benchmark US 10-year notes last rose 6/32 in price to yield 2.1905 per cent, from 2.211 per cent late on Thursday.

"The slight bias to the upside (in stocks) is a result of the CPI number".

"There's not a great incentive to buy big", said Lerner of SunTrust Advisery.


The NASDAQ Composite Index and Dow started the day lower but regained strength and recovered some losses as the day progressed.

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 programmes as Pyongyang's continues missile and nuclear tests in defiance of United Nations sanctions.

North Korea had responded to Trump's previous promise to unleash "fire and fury" with a threat to land missiles near the U.S. Pacific territory of Guam. He said that North Korea "can be very very nervous" if it acts on either the USA or its allies, and warned that "things will happen to them like they never thought possible". The Dow Jones industrial average slid 36.64 points, or 0.2 percent, to 22,048.70. Most other major Asian stock markets were in the red, although Australia bucked the trend with a 0.4% gain. The index had its biggest drop since mid-May a day earlier. Northern Star Resources was up 3 per cent, while Evolution Mining rose 2 per cent, Newcrest Mining gained 2.3 per cent and Resolute Mining rose 2.1 per cent. Westgold Resources was the biggest gainer, rising 6.6 per cent.

"Since these are the stocks that have been in the spotlight the most, they tend to have the most volatility upwards and downwards", said Chris Bertelsen, chief investment officer of Aviance Capital Management in Sarasota, Florida. The news drove investors out of risky assets and into safe-haven assets like gold, U.S. Treasurys and the Japanese Yen.

The Labor Department said its consumer price index inched up by 0.1 percent in July after coming in unchanged in June.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, was up 1.17 points at 12.12 points, its highest level in a month.

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