Rises if Risk is On, Falls if Risk is Off

Investors fled to safe-haven investments after US President Donald Trump issued North Korea with an apocalyptic warning over its nuclear weapons programme

Investors fled to safe-haven investments after US President Donald Trump issued North Korea with an apocalyptic warning over its nuclear weapons programme

Gold prices were up almost 1% (http://www.marketwatch.com/story/gold-gains-about-1-as-us-north-korea-tensions-grow-2017-08-09) to $1,273.30 an ounce.

Falls were also seen on Wall Street, with the Dow Jones Industrial Average down 0.5% about 15 minutes into trading and the Nasdaq tumbling by 0.6%. Alliance Data Systems fell $6.28, or 2.7 percent, to $225.64.

At its worst, the FTSE 100 was down 121 points, or 1.6%, at around 3pm, also pressured by some companies going ex-dividend, and disappointing export and construction data. All the indexes are down for the week.

The Swiss franc, by contrast, was on track for its biggest single-day rise against the euro in more than 2 1/2 years.

KOREAN STOCKS: Investors didn't panic but saw Trump's comments as a chance to take profits, said Seo Sang Young, a market strategist at Kiwoom Securities in Seoul. Utilities eked out a small gain.

Stocks ended more than one percent down in Seoul while the won slumped to a three-week low against the dollar as the USA president and South Korea's volatile neighbour dramatically ramped up their war of words. "This is mainly due to the fact that in the event of a crisis involving the United States directly, investors are more likely to seek refuge in an asset like gold which bears no country risk and also benefits when the dollar depreciates", Gambarini writes.

Trump was responding to North Korea's claim it was completing plans to fire four intermediate-range missiles over Japan to land near the US Pacific territory of Guam.

European stocks have fallen for a third day on Friday and look headed for their worst week since early November a year ago, as US President Donald Trump's rhetoric on North Korea over the past few days made investors risk averse. Those highs were supported by strong corporate earnings, but lofty market valuations and a prolonged period without a significant market pullback had some analysts predicting a sell-off.

In an apparent response to Trump's tweet, a statement issued by North Korea's official KCNA news agency claimed the president is "driving the situation on the Korean peninsula to the brink of a nuclear war". It has been the leading S&P gainer so far this year, making it particularly vulnerable to a decline.

Macy's (M.N) shares closed down 10.2 percent and Kohl's (KSS.N) fell nearly 6 percent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off.

HIGH ON TECH: Gains among chipmakers and digital storage companies helped lift technology-sector stocks. Bank of New York Mellon slid $2.09, or 3.9 percent, to $51.95, while Citizens Financial Group shed $1.32, or 3.8 percent, to $33.71.

The dollar index.DXY dipped to a one-week low after the data.

Benchmark U.S. crude fell 97 cents, or 2 percent, to $48.59 a barrel on the New York Mercantile Exchange.

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