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| Stocks Fall as Tensions Rise Between U.S. and North Korea | |
| (about 4 hours later) | |
| Saber rattling between the United States and North Korea sent stock markets lower on Wednesday as investors shifted their money into assets considered to be havens in times of trouble. | |
| Stocks in the United States opened lower, following on from declines in Europe and Asia earlier in the day. The Dow Jones industrial average fell 0.3 percent in early trading in New York, while the Nasdaq dropped nearly 1 percent. The declines came after stock markets in Britain, France and Germany fell in the European afternoon, and share indexes in Japan and South Korea closed down. | |
| Investors appeared to be moving their money into the relative safety of bond markets. Yields on 10-year Treasuries, as well as British and European bonds, which move inversely to the price, were lower on Wednesday morning. The price of gold, which tends to perform well in times of high tension, was also up. | |
| The weaker markets followed President Trump’s warning to North Korea that it would see “fire and fury like the world has never seen” if it continued to threaten the United States. Several hours later, North Korea said it was considering a strike that would create “an enveloping fire” around Guam, the Pacific island where the United States stations military personnel. | The weaker markets followed President Trump’s warning to North Korea that it would see “fire and fury like the world has never seen” if it continued to threaten the United States. Several hours later, North Korea said it was considering a strike that would create “an enveloping fire” around Guam, the Pacific island where the United States stations military personnel. |
| France’s CAC 40 share index dropped 1.5 percent by the afternoon in Europe, while Germany’s DAX fell 1.3 percent. Earlier, Japan’s benchmark stock index closed down 1.3 percent and South Korea’s declined 1.1 percent. | |
| Still, the limited reaction suggests investors have not yet become alarmed by the escalating rhetoric. North Korea has long loomed as a potential disruptive force in Asia, and even South Korean investments have been largely stable during past provocations. | Still, the limited reaction suggests investors have not yet become alarmed by the escalating rhetoric. North Korea has long loomed as a potential disruptive force in Asia, and even South Korean investments have been largely stable during past provocations. |
| Most Asian markets have made significant gains in recent months as part of a strong performance worldwide, thanks to improving corporate profits in the United States and elsewhere. Perceptions that China has managed problems like heavy debt and capital outflows fairly well for now, as well as slow but steady economic growth in Japan, have helped stocks in the region. | Most Asian markets have made significant gains in recent months as part of a strong performance worldwide, thanks to improving corporate profits in the United States and elsewhere. Perceptions that China has managed problems like heavy debt and capital outflows fairly well for now, as well as slow but steady economic growth in Japan, have helped stocks in the region. |