Stocks, dollar extend slide as US, North Korea tensions intensify

Stocks, dollar extend slide as US, North Korea tensions intensify

Secretary of State Rex Tillerson later insisted the US isn't signalling it's about to mete out a military response despite threats from North Korea suggesting it could attack Guam, a USA island territory in the Pacific. The Dow Jones industrial average slid 0.2 percent to 22,048.70. In the previous session, USA stocks finished in the red. These have ranged from an investigation into Russia's possible interference in the 2016 US presidential election, to concerns about China's risky debt levels, to stubbornly low inflation in the U.S.

Investors are losing enthusiasm for Canada's banking stocks as a slowdown in the country's housing market dents banks' growth prospects, with insurance companies seen as a better bet to benefit from higher interest rates. The index closed at 16.04 overnight, the highest level since November 8, when Trump was elected president.

The ongoing standoff between North Korea and America has seen gold rise to a two-month high.

S&P 500 e-mini futures were down 0.3 percent, pointing to weakness on Wall Street later in the day. US -traded Nikkei futures fell 2 percent to their lowest since mid-May. The dollar slipped 0.4 percent against its perceived safe-haven Japanese counterpart to 109.84 yen, its lowest since mid-June.

Japan is the world's biggest creditor nation and there is an assumption investors there will repatriate funds should a crisis eventuate.

Low U.S. Treasury yields are also weighing on the dollar.

The Japanese yen strengthened 0.24 percent versus the greenback at 110.04 per dollar.

Benchmark U.S. 10-year notes were last up 15/32 in price to yield 2.2281 percent, from 2.282 percent late on Tuesday.

The dollar was steady against a basket of six major currencies at 93.385 after falling 0.2 percent on Thursday, with disappointing USA inflation and jobs data adding to the greenback's woes.

A spokesman for the Korean People's Army said in a statement on Wednesday it was "carefully examining" plans for a missile attack on the U.S.

Information technology fell 1.24 percent, hurt by a 16.6 percent plunge to C$66.50 in Kinaxis Inc stock. Some of Canada's biggest banks were also influential decliners, but closed with only moderate losses. "We believe continued saber-rattling ... could take gold prices higher still", Nitesh Shah, director at ETF Securities, told Reuters. They have soared over 2 percent in the previous two sessions, and are set for a weekly gain of 2.26 percent.

Valeant's stock, which rallied a day before following quarterly results, sank 9.6 percent to C$17.85 after it said its subsidiaries in Australia were the subject of a tax audit.

The pan-European FTSEurofirst 300 index lost 0.77 percent and MSCI's gauge of stocks across the globe shed 0.37 percent. It is poised to end the week down 1.7 percent.

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