S&P falls 1.4 pct in safety flight on N. Korea tensions

Nervous investors drove shares lower earlier in the week, after President Trump declared Tuesday that the US would react with "fire and fury" to further nuclear provocations from North Korea.

Asian stock markets slid Wednesday following Wall Street's decline as President Donald Trump and North Korea traded threats over the North's nuclear program. They suggest the USA and China, a North Korean ally, could work together to de-escalate the situation.

On Monday, Liberty Korea Party leader Hong Joon-pyo called for the deployment of American tactical nuclear weapons, saying, "Peace will come when we achieve a balance of power, not when we are begging for it". October Brent crude rose $0.56, or 1.1%, to $52.70.

The Dow Jones Industrial Average closed down 204.69 points, or 0.93 percent, at 21,844.01, the S&P 500 lost 35.81 points, or 1.45 percent, to end the session at 2,438.21 and the Nasdaq Composite fell 135.46 points, or 2.13 percent, to 6,216.87.

The S&P 500 and Nasdaq followed the Dow, falling 1.5 percent and 2.1 percent, respectively.

Spot gold XAU= added 0.7 percent to $1,285.70 an ounce.

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

The rhetoric between the U.S. and North Korea has continued to heat up, leading traders to look to safe havens such as gold and treasuries.

A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalisation drop from a record high US$61.36 trillion on Monday to US$60.43 trillion at the close on Thursday.

Global Stocks Poised for Weekly Declines
On Tuesday, August 8, despite that new record high, the market pulled back and closed lower due to decreased risk appetite. The dollar index .DXY , which measures the US currency against a basket of other major currencies, fell 0.14 percent.

The dollar was further weighed on Friday by the soft USA inflation data.

Excessive geopolitical fears surrounding North Korea seemed to have receded, traders say, but activity is expected to stay subdued with Japanese markets closed on Friday.

The dollar index fell 0.32 per cent, with the euro up 0.42 per cent to US$1.1819.

"After today's data and commentary from Dudley, if we see even a near-miss on CPI tomorrow, I think the dollar has got quite a bit of room to sell off", Sweeting said.

The 30-year bond last rose 6/32 in price to yield 2.7847 percent, from 2.794 percent late on Thursday.

Gold, another classic safe haven asset, was trading at around US$1,285 per ounce, up more than two percent this week and near a nine-week high.

U.S. Treasury yields fell Wednesday with yields on the 10-year note at a six-week low.

In oil, the price of Brent crude sunk by 0.5% to 51.65 USA dollars a barrel amid concerns about over supply in the market.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories, leaving prices volatile.

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