Wall St falls on ramp-up of U.S. tension with N. Korea

A trader works on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange

A trader works on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange

At 9.38 am ET (1338 GMT) the Dow Jones Industrial Average was down 85.43 points, or 0.39 per cent, at 21,963.27, the S&P 500 was down 10.31 points, or 0.42 per cent at 2,463.71.

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

Japan said on Tuesday it was possible that North Korea had already developed nuclear warheads and warned of an acute threat posed by its weapons programs as Pyongyang's continues missile and nuclear tests in defiance of United Nations sanctions.

The FTSE 100 Index closed down 1.4%, or 108.12 points to 7,389.94, with Pyongyang unveiling plans to launch a volley of ballistic missiles towards the US Pacific territory of Guam, an America military hub.

Trump further ratcheted up the rhetoric in remarks this afternoon, suggesting that his "fire and fury" comments may not have been tough enough. He assured that the "people of our country are safe, our allies our safe". The Korean won fell against the US dollar.

INFLATION: The Labor Department said consumer prices edged up 0.1 percent in July following no gain in June. Economists had expected another 0.1% uptick.

BONDS: Bond prices rose.

Amid broad based weakness on Wall Street, biotechnology stocks turned in some of the market's worst performances on the day. That's the index's lowest level in two months.

Cempra (CEMP) helped to lead the biotech sector lower, extending the pullback seen over the course of the previous session. In Asia, several indexes closed lower overnight.

Second-quarter earnings have been stronger than expected with analysts now expecting S&P 500 earnings to have expanded 11.8 percent, up from 8 percent at the start of July, according to Thomson Reuters I/B/E/S.

Retail results are also on investors' mind as the second-quarter earning season winds down. The strength in the sector came as gold for December delivery jumped USD10.80 to USD1,290.10 an ounce.

Sterling was also down 0.1% versus the euro at 1.104.

The major European markets also saw continued weakness on the day.

The Dow fell more than 200 points, a almost 1% drop, and its biggest dip in three months. "If we were threatened, the USA would take action and there'd be a Treasury rally", said Battle.

The pan-European STOXX 600 was down 0.7% at closing, France's CAC 40 fell 1.4% after a auto hit a group of soldiers in Paris in what is thought to have been a deliberate act, and a fall in bond yields saw Germany's DAX down 1.1%. Stocks took a hit for a third straight day Thursday as North Korea's nuclear threats seemed again to roil the markets.

On the earnings front, News Corp.

Sharp pull backs defined the indexes in today's trading.

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.

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