N. Korea tensions whack stocks

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - ALEX VEIGA

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.

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