Wall Street Stages Recovery, but North Korea Keeps Rally From Takeoff

A currency trader gestures at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul South Korea Friday Aug. 11 2017. Asian stock markets slumped on Friday following overnight losses on Wall Street as U.S. President Donald Trump

USA stocks closed barely down on Wednesday as investors appeared to turn their focus away from North Korea-related geopolitical tension that weighed on equities for most of the session.

Tensions between the USA and North Korea continued to simmer early Friday.

The Dow Jones Industrial Average fell 0.9 percent to end at 21,844.01, the only close below 22,000 since breaking through that level for the first time August 2.

Foreigners and retail investors offloaded shares worth more than 286 billion won (US$250 million) and 168 billion won, respectively, while institutions scooped up more than 429 billion won, keeping the main index from falling further.

Buying interest is somewhat subdued, however, as the ever-escalating war of words between President Donald Trump and North Korea continues to raise geopolitical concerns.

But although U.S. equities on Wednesday managed to close only slightly down even after Trump's warning that "fire and fury" would rain on North Korea, yesterday the chickens came home to roost on Wall Street. The stock has more than doubled over the past 12 months, gaining more than 160%.

US Defense Secretary Jim Mattis, who often has emphasized the devastating costs of any conflict with North Korea, seemed to back up Trump's tone. The S&P 500 is up 9 percent, while the Dow is up 10.6 percent.

North Korea had announced a detailed plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, a major military hub and home to U.S. bombers.

Positive sentiment was also generated by a report from the Labor Department showing a modest uptick in consumer prices in the month of July.

Sterling was relatively flat against the dollar at 1.3002 after earlier wavering, but gained 0.14% on the euro to 1.1072, with the single currency down by a similar degree against the greenback, which in turn was down 0.38% against the yen. Rival Advanced Micro Devices was also down 3.4 percent.

Watch maker Fossil Group plunged 25 percent after reporting a weak quarter. Brent crude, used to price worldwide oils, rose 20 cents to $52.10 a barrel in London.

In Europe, Germany's DAX rose 0.3 percent, while France's CAC 40 added 0.2 percent. Britain's FTSE 100 was down 1.1 percent.

Safe havens benefited from the move away from stocks - gold rising again to around $1,290 an ounce after surging 1.3 percent Wednesday - but other risky assets such as oil and copper held their price.

The UK's deficit in goods and services, the gap between exports and imports, climbed by £2 billion to £4.6 billion between May and June after a drop in exported goods.

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