Published: Sat, August 12, 2017
Business | By Max Garcia

North Korea Threat: US, Japanese troops prepare for war

North Korea Threat: US, Japanese troops prepare for war

Just hours before North Korea's warning, US President Donald Trump warned Pyongyang that if it continued to threaten Washington, the Communist nation would face "fire and fury" the world has never seen.

Wall Street's fear gauge-the CBOE Volatility Index or the VIX-jumped 36 percent to 15.06. Mainland markets also traded below the flat line, with the Shanghai Composite slipping 0.18% and the Shenzhen Composite lower by 0.14%.

Chinese stocks seemed little affected though, and Australian stocks rose Wednesday after a weaker Tuesday amid strong earnings reports from big banks. Technology companies were leading a broad slide in USA stocks in early trading Thursday, Aug. 10, 2017, as investors pored over the latest batch of corporate earnings reports. The Standard & Poor's 500 index dropped 1.4 percent to 2,438.21. The greenback was down 1.1 against the franc, its worst drop in more than six weeks.

Trump, whose threat this week to bring "fire and fury" was dismissed by North Korea, said Thursday his statement might not have been "tough enough". Secretary of State Rex Tillerson later insisted the USA isn't signalling it's about to mete out a military response despite threats from North Korea suggesting it could attack Guam, a US island territory in the Pacific.

"If we break above this downtrend, then we potentially open up the region up to $1,300, the recent highs we saw in April and June", Butler said.

Bond prices rose. The yield on the 10-year Treasury fell to 2.20 percent.

Thus, investors were shifting from stocks to safe-haven options such as the yen, gold and U.S. Treasurys.

Macy's (M.N) shares closed down 10.2 percent and Kohl's (KSS.N) fell nearly 6 percent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off.

"Traders have finally started to wake up to the risks out there, with North Korea acting as the initial catalyst this week", Colin Cieszynski, chief market strategist at CMC Markets, told MarketWatch. The Dow Jones industrial average slid 36.64 points, or 0.2 percent, to 22,048.70. Netflix lost 1.5 percent. The Russell 2000 index of smaller-company stocks ticked up 0.2% to 1,416. Copper fell 2 cents to $2.90 a pound.

ENERGY: Benchmark U.S. crude gained 28 cents to $49.84 a barrel in electronic trading on the New York Mercantile Exchange.

The dollar slipped below ¥110 in Tokyo trading on Wednesday, as the yen attracted safe-haven buying on growing geopolitical risks over North Korea's missile and nuclear development programs. Brent crude, used to price global oils, added 4 cents to $52.74.

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