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Published: Wed, August 16, 2017
Economy | By Melissa Porter

S&P falls 1.4 percent in safety flight on North Korea tensions

S&P falls 1.4 percent in safety flight on North Korea tensions

United States equities steepened their losses late in the session after President Donald Trump said his earlier warnings to North Korea may not have been tough enough.

Baker Avenue's Lip said the USA market was higher due to "bargain hunters", but "there's more room for the market to come down".

The Dow Jones industrial average closed up 14 points, a gain of 0.07 percent, the Nasdaq composite rose almost 40 points or 0.64 percent and the S&P 500 gained 3 points or 0.13 percent.

Seoul shares hit 11-week low amid selling by foreign investors following Trump's fresh warning to North Korea. Each fell at least 1.4%.

South Korea's KOSPI fell 1.7 percent to its lowest since May 24, but its losses for the week are a relatively modest 3.2 percent.

Heading into Thursday, some 89 percent of the companies in the S&P 500 had reported quarterly results. For the week, the index lost over 3 percent to register its biggest weekly loss since February of 2016. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.48 percent lower.

Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea have proved to be the trigger.

"The dollar is now close to the bottom of a 108 yen to 115 yen range". (NYSE: GS) fell 2.4% and Cisco Systems Inc.

The dollar was further weighed Friday by the soft US inflation data.

"The market is trying to interpret the CPI data as somewhat positive because it is anticipating that the Fed will be on hold not only in September but also possibly in December", said Robert Pavlik, chief market strategist at Boston Private Wealth.

The dollar index, which measures the greenback against a basket of six major currencies, held steady at 93.096, after slipping around 0.3 percent on Friday. Basically if the streak of trading days without a 1%+ up or down day is going to be broken, it's better for it to break with a 1%+ down day than a 1%+ up day.

The data comes amid tepid inflation that has remained below the Fed's 2 percent target, despite low unemployment.

Investors instead turned to safe-haven assets such as gold, pushing it to a two-month high, and the Japanese yen rose.

The 30-year bond last /32 in price to yield 2.7933 percent, from 2.794 percent late on Thursday.

In the first four days of the week, the Standard & Poor's 500 index swung from marking its latest record high to posting its biggest single-day drop in almost three months.

US stock futures rose 0.6 per cent, suggesting a higher open later in the day.

Amid the hot rhetoric, US stocks sold off sharply on Thursday, with the S&P 500 falling more than 1 percent.

Gold added $3.90 to settle at $1,294 an ounce.

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