S&P falls 1.4% in safety flight on North Korea tensions

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More than £27 billion was wiped off the value of blue-chip stocks on Thursday as investors remained spooked by the simmering tensions between the United States and North Korea.

If the North Korean regime "does anything" to the U.S. or a United States ally "things will happen to them like they never thought possible", he told reporters on Thursday, according to Bloomberg.

The Dow Jones Industrial Average rose 44.33 points, or 0.2 percent, to 21,888.34, the S&P 500 gained 6.01 points, or 0.25 percent, to 2,444.22 and the Nasdaq Composite added 32.10 points, or 0.52 percent, to 6,248.97.

As a result, on Wednesday evening the VIX volatility index, having recently hit an all-time low, spiked from 9.54 just after Europe went home and around 10 when the comments hit the wires to reach a peak of 11.29 with 30 minutes left in the USA session before closing at 10.96.

US stocks closed higher on Friday as Wall Street clawed back from a sharp decline in the previous session but the market still posted a weekly loss on lingering geopolitical uncertainties.

Late in the afternoon, Trump told reporters that his "fire and fury" warning to North Korea may not have been tough enough.

More than 430 stocks from all USA exchanges hit their lowest levels in 52 weeks or more yesterday, the most for any session since mid-November right after Trump was elected. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.48 percent lower.

Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea have proved to be the trigger.

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"Risk aversion is once again the name of the game.as geopolitical tensions mount and investors head for cover in the traditional safe havens", said Oanda analyst Craig Erlam.

Overnight, North Korea raised the stakes further by outlining a plan to fire a missile into the water near Guam, the USA territory in the Pacific.

Positive sentiment was also generated by a report from the Labor Department showing a modest uptick in consumer prices in the month of July.

Gold held steady at two-month high with spot gold rising 0.1 percent to $1,287.83 per ounce, putting the precious metal on pace for its biggest weekly gains since April. Rival Advanced Micro Devices was also down 3.4 percent.

The September crude contract was up 20 cents to US$49.76 per barrel and the September natural gas contract was up seven cents to US$2.95 per mmBTU.

Nevsun Resources Ltd offset some of the material group's gains, plunging 18.4 percent to C$2.685 after the company reported disappointing quarterly results. Travel-review website operator TripAdvisor was down 2.7 percent. "I think before the end of the year the market goes to new highs and (Treasury) yields go higher". Netflix was down 1.8 percent.

European markets fared much the same fate with the DAX closing 1.12% lower at 12,154.00, and the CAC 40 down 1.40% at 5,145.70.

The dollar index fell 0.3 percent, with the euro up 0.36 percent to $1.1812.

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