North Korea standoff wipes $1trn off global stocks

The Standard & Poor's 500 index fell 5.99 points

The average for new 52-week lows this year is about 230 per day. On Thursday, the Dow Jones index dropped 0.9 percent, or 204,69 points, to 21 844,01.

Nevsun Resources Ltd offset some of the material group's gains, plunging 16.4 per cent to C$2.75 after the company reported disappointing quarterly results.

Excluding food and energy prices, core consumer prices still crept up by 0.1% in July, matching the increases seen in the three previous months. Fashion chain Michael Kors jumped nearly 22 percent, after better than expected results.

The dollar weakened after news that USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

"The most visible impact of escalating verbal threats between North Korea and President Trump comes at the long end of the U.S. Treasury curve", said Jim Vogel, interest rates strategist at FTN Financial in Memphis. "If the market really believed that the reaction of north korea was imminent, I think it would drop much more" nuanced Alan Skrainka. Now installed in the White House, Trump issued a new warning to Pyongyang on Friday, tweeting: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely. Hopefully Kim Jong Un will find another path!"

Gold has rallied 2.3% this week on the heels of renewed tension with North Korea.

The last time the S&P closed down more than 1 per cent was May 17 when it fell 1.8 per cent.

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MSCI's main index of Asia-Pacific shares, excluding Japan, was last down 0.6%.

The S&P is trading near its most expensive valuation level since 2004, as measured by the price-to-12-month forward earnings ratio. Utilities was the only sector that closed positive on August 10.

The UK's stock market ended the week down 1.1% as worries over the situation between the USA and North Korea continue to rattle investors. "Standard safe haven instruments are still being preferred at this point, with the yen well bid against its peers and gold a little higher after seeing strong gains on Wednesday, while equities are getting no love", said Craig Erlam, senior market analyst, at Oanda.

The euro was down 0.1 percent at $1.175 while the dollar fell 0.6 percent to 109.68 yen.

Although Japan could be in the front line of any clash with North Korea, the yen is benefitting because Japan is the world's biggest creditor nation and Japanese investors tend to repatriate funds in times of stress, attracting other flows.

"However, investors are also happy to spend a bit of premium to buy downside protection while staying invested".

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