Dow drops 100 points on North Korea missile test

A video board displays the closing numbers on the floor after the closing bell of the Dow Industrial Average at the New York Stock Exchange on Aug 23, 2017 in New York. PHOTO: AFP

NEW YORK (REUTERS) - The Dow fell more than 100 points at the open on Tuesday as North Korea's missile test over Japan prompted President Donald Trump to warn that "all options are on the table", triggering a flight to safety among investors.

The missile, tested early on Tuesday, flew over Japan and landed in the Pacific about 735 miles off the northern region of Hokkaido, a rare occasion when North Korea fired projectiles over mainland Japan.

"It is a risk-off mode and ... investors are either staying on the sidelines for this dust to settle or booking their gains," said Naeem Aslam, chief market analyst at Think Markets UK. Investors scampered to safe-haven assets, with gold jumping to its highest since November and the benchmark US 10-year treasury yield dipping to its lowest since the day after the Nov. 8 US presidential election.

The news also jolted the CBOE Volatility index, which rose 1.95 points to 13.27. Investors have been pouring into exchange-traded products (ETPs) linked to Vix, particularly and, that were up about 11 per cent in heavy volumes. iShares MSCI Emerging Markets ETF was down nearly 1 per cent.

The S&P and the Dow ended little changed on Monday, with energy and bank shares lower as Tropical Storm Harvey crippled the U.S. energy hub in Texas.

"The effects of Hurricane Harvey are still going to remain prominent as the flooding continues. It is going to have some serious economic impact and just how large that would be is still unclear," Aslam said.

At 9:36 a.m. ET (9:36 p.m. Singapore time), the Dow Jones Industrial Average was down 100.14 points, or 0.46 per cent, at 21,708.26, the S&P 500 was down 11.43 points, or 0.46 per cent, at 2,432.81. The Nasdaq Composite was down 35.69 points, or 0.57 per cent, at 6,247.33.

Nine of the 11 major S&P sectors were lower, with the financial index's 1.08 per cent loss leading the decliners. US-listed shares of gold miners rose, with Kinross Gold rising 2.5 per cent and Harmony Gold gaining about 5 per cent. Defense stocks rose.

Best Buy was down 6.33 per cent after the No. 1 U.S. consumer electronics retailer warned that its strong quarterly same-store sales performance should not be seen as a "new normal".

Declining issues outnumbered advancers on the NYSE by 1,988 to 629. On the Nasdaq, 1,659 issues fell and 606 advanced.

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