US stocks tumble on North Korea worries

A man walks by the New York Stock Exchange, Aug 10, 2017.
A man walks by the New York Stock Exchange, Aug 10, 2017.PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks posted their biggest declines in nearly three months on Thursday (Aug 10) as President Donald Trump doubled down on his warnings to North Korea over its nuclear programme.

Trump, whose threat this week to bring "fire and fury" was dismissed by North Korea, said on Thursday that statement might not have been "tough enough."

US stocks deepened their losses following the latest Trump comments, and the S&P 500 volatility index, known unofficially as the "fear index," rose decisively.

The Dow Jones Industrial Average fell 0.9 per cent to end at 21,844.01, the only close below 22,000 since breaking through that level for the first time Aug 2.

The broad-based S&P 500 was hit even harder, dropping 1.5 per cent to close at 2,438.22, while the tech-rich Nasdaq Composite Index lost 2.2 per cent 6,216.87.

Despite the drop, analysts said the market seemed to be a bit sceptical that the North Korea situation would grow into a major crisis, noting that the losses were still not that deep.

"If the market truly believed the North Korea reaction was imminent, I think it would be down a lot more than it is," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

High-flying technology names suffered outsized losses on the day, with Apple falling 3.2 per cent, Amazon 2.6 per cent and Facebook 2.2 per cent. Biotech companies Celgene and Amgen lost 3.8 per cent and 2.6 per cent, respectively.

Retailers were all under pressure after Macy's and Kohl's each reported lower second-quarter sales, reviving worries about consumer discretionary stocks. Macy's sank 10.3 per cent and Kohl's lost 5.8 per cent.