U.S. stocks tumble on North Korea worries

U.S. stocks tumble on North Korea worries

The Nasdaq and the S&P 500 are rebounding after ending Thursday's trading at their lowest closing levels in a month.

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

Buying interest is somewhat subdued, however, as the ever-escalating war of words between President Donald Trump and North Korea continues to raise geopolitical concerns.

Weaker-than-expected July consumer price data led investors to bet that benign inflation would keep the U.S. Federal Reserve from raising rates again this year.

The Dow and S&P 500 inched higher on the day but they both posted their largest weekly percentage drops since late March. The Dow Jones industrial average slid 0.9 percent to 21,844.01.

Nasdaq 100 e-minis were down 17 points, or 0.29 percent, on volume of 36,232 contracts. Shares of Macy's lost 10% and Kohl's fell 5.8%.

But in some respects, investors do seem more scared.

The S&P was only down 0.1 percent for the week entering the session.

But although United States equities on Wednesday managed to close only slightly down even after Trump's warning that "fire and fury" would rain on North Korea, on Thursday the chickens came home to roost on Wall Street.

Investors heard the threats hurled between the USA and North Korea this week and upheld a time-honored tradition: They panicked and sold stocks.

The remarks, following North Korea's earlier revelation of a plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, gave investors further incentive to take to the sidelines at least in stock markets.

Still, there were fewer signs of anxiousness in the markets Friday.

Kohl's stock dropped almost six percent despite better than expected earnings. It's still the highest it's been since May.

The latest U.S. economic data cemented expectations that inflation will remain subdued amid a robust labour market.

Dudley also cautioned that "it's going to take some time" for inflation to rise to the central bank's 2 percent target even as he offered a generally positive outlook for the US economy, job market and price pressures. "The pot is on the stove boiling but no inflation steam is coming out".

He told reporters in the late afternoon that he hoped North Korea "fully" understood the gravity of his warning about taking military action against the U.S. or its allies.

Canadian Tire Corp Ltd rose 3.4 percent to C$146.65. Biotech companies Celgene and Amgen lost 3.8 percent and 2.6 percent, respectively.

JC Penney slumped 16.56% to a record low after the retailer reported a bigger-than-expected quarterly loss. The company also said sales at its established stores declined for the fourth straight quarter.

Benchmark US 10-year notes last rose 6/32 in price to yield 2.1905 per cent, from 2.211 per cent late on Thursday. Brent crude, used to price global oils, gained 56 cents, to $52.70, in London. Humana Inc. rose $4.74, or 1.9 percent, to $254.96. Natural gas was also flat at $2.98 per 1,000 cubic feet.

The spot gold price was up 0.7% at $1,286.07 per ounce by 2pm GMT, after hitting an earlier high of $1,286.40, its highest level since June 8. It is poised to end the week down 1.9 per cent. In three days. the Nasdaq has lost 2.6% - the most since last September.

The dollar fell to 109.85 yen from 110.48 yen late Tuesday. Against the euro, the dollar is valued at $1.826 compared to yesterday's $1.1772.

Major indexes in Europe closed mostly lower. Australia's S&P/ASX 200 dropped 1.2 percent. Japanese markets were closed for a holiday.