Stocks fall for third day as U.S., N. Korea tensions rattle markets

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Wall Street stocks posted their biggest declines in almost three months Thursday as President Donald Trump doubled down on his warnings to North Korea over its nuclear program.

THE QUOTE: "Risk-averse sentiment is dominating global equities markets, and US indices have retraced from record levels over the last two days".

The broad-based S&P 500 shed 0.6 percent to 2,459.50, while the tech-rich Nasdaq Composite Index tumbled 0.8 percent to 6,299.12.

Apart from geopolitical worries, some technical analysts like Tom McClellan, editor of the McClellan Market Report, blamed seasonality for this week's sharp retreat given August's record as a weak month for stocks.

The CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the US presidential election on Thursday, but was down 1.22 points at 14.82 points on Friday. A batch of disappointing earnings results from big retail chains and simmering tensions between the US and North Korea weighed on the market.

Shares in several other big media companies also declined.

The financial sector index gave back gains after news California insurance regulator will probe whether Wells Fargo & Co and an insurance company harmed residents by selling insurance they did not need. Hong Kong's Hang Seng Index plunged by 2 percent, while South Korea's Kospi Index slumped by 1.7 percent. Macy's sank 10.3 percent and Kohl's lost 5.8 percent. Dillard's Inc. slumped 15.9 percent after the chain booked a loss for the second quarter, as increased inventory led to big discounts. Brent crude, used to price global oils, slid 52 cents, or 1 percent, to $52.18.

FTSE 100 takes cover from war of words over South Korea
In the eurozone, the Paris CAC 40 dropped nearly 0.7 percent to 5,081.92 points compared with the closing level on Thursday. Yields on British and European bonds, which move inversely to the price, were lower on Wednesday morning.

Dow member Disney dropped 3.9 percent as it reported flat third-quarter revenues due in part to weakness in its cable subscription business. The stock fell $1.01 to $22.02. The u.s. central bank, one of whose tasks is to contain the price rise, does not therefore appear to be obliged to accelerate the pace of the slow tightening of monetary that it has committed.

On the currency front, the USA dollar is trading at 108.82 yen compared to the 109.20 yen it fetched at the close of NY trading on Thursday. The yield on the 10-year Treasury note slipped to 2.21 percent from 2.25 percent late Wednesday. It added 39 cents to $49.56 a barrel on Wednesday.

The CBOE Volatility Index (VIX - 11.11) gained 0.2 point, or 1.4%.

The price of gold also surged for the second day in a row as the December bullion contract advanced $10.80 U.S.to $1,290.10 U.S.an ounce.

Korea's Samsung Electronics fell 2.8% Friday.

"Trump's response was aggressive and that's why the market turned lower", said Ken Polcari, Director of the NYSE floor division at ONeil Securities. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman all rose and the Dow Jones US defense index was up 1.6% after hitting a record high.

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