N. Korea tensions whack stocks
Brewing tensions between the United States and North Korea put investors in a selling mood again Thursday, dragging U.S. stocks lower for the third day in a row.
The Standard & Poor’s 500 index dropped 35.81 points, or 1.5 percent, to 2,438.21. The Dow Jones industrial average slid 204.69 points, or 0.9 percent, to 21,844.01, just shy of its low point for the day.
The tech-heavy Nasdaq composite bore the brunt of the sell-off, falling 135.46 points, or 2.1 percent, to 6,216.87. May 17 was the last time the three indexes had a bigger single-day decline.
Smaller-company stocks also fell sharply. The Russell 2000 index gave up 24.40 points, or 1.8 percent, to 1,372.54. All the indexes are down for the week.
Bond prices rose. The yield on the 10-year Treasury note slipped to 2.20 percent from 2.25 percent late Wednesday.
Technology companies, which have been the biggest gainers this year as the market hit a succession of record highs, led the broad slide in stocks. Banks and department store stocks also were among the big decliners. Utilities eked out a small gain.
“The market has been looking for an excuse to sell off, and North Korea and the president gave the market that excuse,” said David Schiegoleit, managing director at the U.S. Bank Private Client Wealth Management. “As long as it doesn’t go beyond just a war of words, this is going to be short-lived.”
Wall Street got off on a downbeat start early Thursday as tensions between the U.S. and North Korea continued to escalate, rattling markets overseas.
Early in the day, North Korea revealed 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.
Later, speaking to reporters, President Donald Trump demanded that North Korea “get their act together” or face extraordinary trouble.
The market jitters gave investors an opportunity to pocket some of their recent gains after a string of record highs fueled by strong corporate earnings.
“There’s not a fundamental reason why what we’re seeing out of North Korea right now should affect stock market prices, but it’s being used as the reason to sell off right now because we’ve been looking for it for so long,” Schiegoleit said. “This really is a profit-taking selloff. I don’t see it as a fear-driven sell-off.”
Technology stocks, the biggest gainers this year, led Thursday’s market slide.
Nvidia fell $7.37, or 4.3 percent, to $164.74, while Advanced Micro Devices gave up 71 cents, or 5.5 percent, to $12.12.
Several financial sector companies also helped pull down the market. 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.
Oil prices closed lower after an early rally faded.
Benchmark U.S. crude fell 97 cents, or 2 percent, to $48.59 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, slid 80 cents, or 1.5 percent, to $51.90.