Wall St opens lower as tensions with N.Korea escalate


NEW YORK, NY - AUGUST 2: President Donald Trump is displayed on a television screen as traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, August 2, 2017 in New York City. The Dow closed above 22,000 for the first time. Drew Angerer/Getty Images/AFP == FOR NEWSPAPERS, INTERNET, TELCOS & TELEVISION USE ONLY ==

NEW YORK: US stock indexes opened lower on Wednesday as investors turned risk averse following rising tensions between North Korea and the United States.

North Korea said it was considering plans to fire missiles at Guam, a US-held Pacific island, after President Donald Trump on Tuesday warned the nuclear-armed nation that it would face ”fire and fury” if it threatened the United States.

Safe-haven assets gained following the mounting geopolitical tensions. Gold rose 1.2%, while the Swiss franc was on track to post its biggest single day rise in about 2½ years.

Trump’s comments also sparked a late afternoon selling on Tuesday, with the Dow ending a nine-day streak of closing records.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, was up 1.03 points at 11.98 points, its highest level in a month.

“The geopolitical tensions have prompted a risk off trade amid investors,” said Naeem Aslam, chief market analyst at Think Markets UK.

“Trump’s comments about North Korea have created nervousness and the fear is if the president really means what he said ”fire and fury”. The typical textbook trade is that investors rush for safe haven, hence we have experienced a bounce for the gold price.”

At 9:37am ET (1337 GMT), the Dow Jones Industrial Average was down 49.62 points, or 0.22%, at 22,035.72, and the S&P 500 was down 8.01 points, or 0.32%, at 2,466.91.

The Nasdaq Composite was down 44.19 points, or 0.69%, at 6,326.27.

Seven of the 11 major S&P sectors were lower, with the consumer discretionary index’s 10.2% fall leading the decliners.

Shares of Dow component Walt Disney were down 4.44% after the company said it will stop providing new movies to Netflix and launch its own streaming service.

Netflix was down 3.22%.

Travel website operator Priceline fell 6.72%, while travel-review website operator TripAdvisor was down 7.74% after both the companies issued disappointing forecasts.

Mylan NV was down 4.88% after the EpiPen maker said delays in launching key new drugs and eroding prices for generics in the United States would hurt its profitability this year and in 2018.

Burger chain Wendy’s was up 4.20% after it reported better-than-expected quarterly profit and sales.

Declining issues outnumbered advancers on the NYSE by 1,859 to 737. On the Nasdaq, 1,787 issues fell and 564 advanced. - Reuters

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