Economy

Tech companies lead broad slide in USA stocks; oil rises

Tech companies lead broad slide in USA stocks; oil rises”

World stocks tumbled for a fourth day and were on course for their worst week since November, as the escalating war of words over North Korea drove investors on Friday toward the yen, the Swiss franc and gold.

The S&P/TSX composite index was down 39.02 points to 15,217.33, with most sectors finishing in the red while bullion stocks surged almost 1.9 per cent.

Josh Saul, chief executive officer of London-based The Pure Gold Company, which is among the bullion merchants reporting incremental trading, said: "We've seen a 64% increase in people purchasing physical gold for the first time in recent sessions citing the breakdown of worldwide relations". Prices for bonds and gold headed higher.

About 6.48 billion shares changed hands on US exchanges on Wednesday compared with the 6.16 billion average for the last 20 sessions.

"The geopolitical tensions have prompted a risk off trade amid investors", said Naeem Aslam, chief market analyst at Think Markets UK.

"We're still close to the all-time high so that makes people a little nervous too, so they might say now might be the time to take a little bit of money off the table".

At 9:37am ET (1337 GMT), the Dow Jones Industrial Average was down 49.62 points, or 0.22%, at 22,035.72, and the S&P 500 was down 8.01 points, or 0.32%, at 2,466.91. Netflix lost 1.5 percent. South Korea's Kospi fell 0.5 percent.

The dollar slipped to as low as 109.11 yen in early Asian trade on Friday, its lowest level since June 14, when the greenback had fallen to as low as 108.81 yen.

"The yen is the big story really".

The dollar index .DXY , which measures against a basket of currencies, fell 0.05 percent.

United States producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week.

U.S. Treasury long-dated yields dropped to six-week lows, pressured by U.S. -North Korea tensions and the weak data that further reduced expectations of an interest rate hike in December. Brent crude, used to price worldwide oils, added 4 cents to $52.74.

OIL: Benchmark U.S. crude lost 36 cents to $48.23 per barrel on the on the New York Mercantile Exchange.

Overall, gold retreated to around $1.285 per ounce later in USA trading. The remarks, following North Korea's earlier revelation of a plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, gave investors a reason to pocket profit in the sectors such as technology that have been the biggest gainers in recent months, analysts said.

The Swiss franc and Japanese yen are often sought in times of geopolitical tension or global financial stress, partly because both countries have big current account surpluses.



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