Tech companies lead broad slide in United States stocks; oil rises


Tech companies lead broad slide in United States stocks; oil rises

Traders turned towards safe-haven assets such as gold, helping the precious metal touch a two-month high, and the Japanese Yen rose.

Investor sentiment turned negative after North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the US Pacific territory of Guam in an unusually detailed threat.

And, on the afternoon of Friday, August 11 we hear Trump say a military solution might be sought to deal with North Korea. "The U.S. president at a [golf] links again let out a load of nonsense about 'fire and fury, ' failing to grasp the on-going grave situation". Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman all rose and the Dow Jones U.S. defense index was up 1.6 percent after hitting a record high.

ANALYST'S TAKE: The U.S.jobs figure "was through the roof" and the NFIB survey "painted a much better picture for the U.S. economy than most believed", Stephen Innes of OANDA said in a report.

Reflecting a drop in prices for services, the Labor Department released a report on Thursday showing an unexpected decrease in US producer prices in the month of July. The 30-year bond was last up 4/32 in price to yield 2.7871 per cent, from 2.794 per cent late on Thursday.

ASIA'S DAY: Earlier, Asia bore the brunt of the mounting geopolitical uncertainty, with South Korea's Kospi index closing down 1.7 percent at 2,319.71 and Hong Kong's Hang Seng ending 2 percent lower at 26,883.51. The S&P 500 closed 0.04% lower while the Nasdaq Composite closed at 6352.33, down 0.28%. But for the week the S&P 500 lost 1.3 percent, its worst weekly showing since March.

"For now, tensions are high, yet in all likeliness we will see this intensity simmer down somewhat, with both sides standing to lose more than they would gain from military action", he added.

The market was also waiting for United States inflation data on Friday that would offer clues about the extent to which the strengthening United States labour market is spilling over into inflation. The dollar index, which measures its strength against a basket of currencies, was roughly flat at 93.420.

Despite today's jump, gold still sits well below its 52-week high of over $1,350 per ounce, which it reached last summer.

Oil prices rose before a report expected to show US crude stocks fell for a sixth week.

Excluding food and energy prices, core consumer prices still crept up by 0.1% in July, matching the increases seen in the three previous months. That "looks high enough to be consistent with a 5 percent-plus pace for real GDP growth", said Jim O'Sullivan of High Frequency Economics in a report.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories, leaving prices volatile.

In commodities trading, crude oil futures are slipping USD0.10 to USD48.49 a barrel after tumbling USD0.97 to USD48.59 a barrel on Thursday.