North Korea nerves push stocks down for third day, lift gold

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Stocks are lower at midday as investors weighed the growing tensions between the US and North Korea.

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

"Of course, it's all come at a time when share markets are due for a correction so North Korea has provided a ideal trigger".

"With European, U.S. and Asian markets all suffering heavily in anticipation of a potential conflict in Asia, it is worthwhile noting that we have heard similar posturing between Trump and Kim Jong Un before", said Mahony.

Japanese markets were closed for a holiday but the tense mood dragged Asian shares lower and an MSCI index of stocks across the globe was on track to post its largest weekly drop since the week before Donald Trump won the US presidential election in November.

LONDON, Aug 10 (Reuters) - World stocks fell for a third day on Thursday and investors moved again into the Swiss franc, yen and gold, prompted by the war of words between the United States and North Korea.

In an apparent response to Trump's tweet, a statement issued by North Korea's official KCNA news agency claimed the president is "driving the situation on the Korean peninsula to the brink of a nuclear war".

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

But the yen added to an already-strong weekly rally of close to 1.5 percent, hitting its highest in nearly four months versus the dollar at 108.73 yen.

The last time the S&P closed down more than 1 percent was May 17 when it fell 1.8 percent.

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Green spoke about the escalating tensions at a news conference. It was trading at 109.16 yen, after retreating 0.8 percent on Thursday.

The utilities index, often seen as a bond proxy because of its companies' slow reliable growth and high dividends, was the only S&P sector that ended the day up, showing a 0.25 percent gain. Brent crude, used to price worldwide oils, added 4 cents to $52.74.

The US dollar set an eight-week low against the yen after US President Donald Trump further ratcheted up the rhetoric, suggesting that his "fire and fury" comments may not have been tough enough.

The Korean won also continued to skid, down 0.45 percent to 1,147.2, falling below its 200-day moving average for the first time in a month.

Australian shares fell to near three-week lows in a broad-based selloff.

Emerging market stocks lost 1.28 percent. News Corp tumbled 5.4% and REA Group slumped 6% after disappointing full-year results.

The Standard & Poor's 500 index fell less than a point to 2,474, making up much of the ground it lost earlier.

"Both (PPI measures) were well below consensus and give us no hope that consumer price inflation is going to materially beat expectations", said Chris Weston, chief market strategist at IG Markets.

U.S. crude was down 0.9% at $48.16 a barrel, on track for a weekly loss of 2.9%.

A report on consumer price inflation is likely to attract attention on Friday, with consumer prices expected to rise by 0.2 percent in July.

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