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12 Agosto 2017, 06:14 | Crisanna Felipe
Wall Street swings lower after Trump warns North Korea
In other news, USA wholesale inflation dropped in July, the first contraction in almost a year and another data point that could weaken the case for the Federal Reserve to raise the benchmark interest rate again later this year.
The thirty-year bond auction drew a high yield of 2.818 percent and a bid-to-cover ratio of 2.32, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.29. It has been more than a year since the last 5% downdraft in stocks and more than 76 weeks since the stock market suffered a 10% loss. North Korea said that it was considering Guam as a target to fire missiles.
Mounting tensions lifted U.S. defense stocks.
"Geopolitics splashed cold water on the markets", said J. J. Kinahan, chief strategist at TD Ameritrade. In a tense situation like this, equity markets can move lower exceptionally fast, and investors don't want to be caught on the wrong side of the markets, so they are getting out now'.
Investors, who took the North Korea report from Japan in their stride earlier in the day, lost their appetite for risk after Trump's comments to reporters during his vacation at his golf club in New Jersey.
The CBOEVolatility Index .VIX , the most widely followed barometer of expected near-term stock market volatility, rose to a near three-month high of 15.36.
Blue Apron Holdings fell 18% after saying it lost more money than analysts had expected in its first quarterly earnings report since going public in June. The stock fell another 2 cents, or 0.4%, to 5.12 Friday.
Traders snapped up shares in companies that delivered strong quarterly results.
Travel website operator Priceline Group Inc fell 6.9 percent after a disappointing financial forecast. The stock was the biggest gainer in the S&P 500, rising $8.02 to $45.25.
Overall, the healthcare sector slumped 3.4 percent.
Data released overnight by RICS (Royal Institute of Chartered Surveyors) was weighing on housebuilding stocks, with the figures suggesting that declines are starting to spread beyond London as political uncertainty and tax changes weigh on the top end of the market.
USA trading volume has been low with summer setting in and Congress expected to be in recess until September 5.
The rhetoric between the USA and North Korea has continued to heat up, leading traders to look to safe havens such as gold and treasuries. Brent crude, the worldwide standard, lost 23 cents to $52.14 a barrel in London.
The December gold contract was ahead $16.70 to US$1,279.30 an ounce.
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Jittery stock markets fall amid global tension over North Korea
Unit labor costs had been expected to climb by 1.2% compared to the 2.2% jump that had been reported for the previous quarter. The data comes amid tepid inflation that has remained below the Federal Reserve's 2 percent target, despite low unemployment.