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While you were sleeping: 'Fire and fury' hits stocks

Wednesday 9th August 2017

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Wall Street fell, giving up earlier gains that had sent the Dow to a fresh record high, after US President Donald Trump issued a warning to North Korea, illustrating intensifying tension between the two nations. 

North Korea "will be met with fire and fury" if it keeps threatening the US, Trump told reporters at the Trump National Golf Club in Bedminster, New Jersey, according to media reports. 

In 3.28pm trading in New York, the Dow Jones Industrial Average fell 0.15 percent, while the Nasdaq Composite Index declined 0.18 percent. In 3.14pm trading, the Standard & Poor’s 500 Index inched 0.06 percent lower.

Earlier in the day, the Dow had climbed to a record high of 22,179.11.

In the Dow, declines in shares of Merck and those of DuPont, recently down 0.9 percent and 0.8 percent respectively, outweighed gains in shares of Apple and those of Microsoft, recently up 1.3 percent and 0.7 percent respectively.

The latest corporate earnings included those from Michael Kors. The stock jumped, up 21.6 percent as of 3.40pm, after the maker of luxury handbags and apparel posted results that exceed expectations. 

However, shares of Dean Foods tumbled, trading 20.1 percent weaker at US$11.96 as of 2.24pm in New York, after the US dairy processor posted quarterly results that fell short of expectations and downgraded its full-year forecast amid “a challenging and rapidly evolving retail environment.”

Net income dropped to US$18 million in the second quarter, down from US$33 million in the same quarter a year earlier, the company said in a statement. 

"We experienced volume pressure from both a macro and competitive perspective that impacted our total volume performance within the quarter, and we anticipate this will carry forward for the remainder of 2017,” Chief Executive Officer Ralph Scozzafava said in a statement.

“Our financial results came in well below our expectations,” Scozzafava noted. “We are accelerating and expanding an aggressive set of commercial and cost productivity initiatives to address volume and mix. We expect these actions will better position our company for the future.”

Overall, second-quarter results have been stronger than expected with analysts now expecting S&P 500 earnings to have expanded 11.8 percent, up from 8 percent at the start of July, Reuters reported.

In the latest US economic data, the Labour Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed job openings rose by 461,000 to a seasonally adjusted 6.2 million, a record high. The data fuelled bets the Federal Reserve will start unwinding its balance sheet at its next two-day meeting in September. 

"Companies are running out of workers to hire to do the job or even train to do the work, and this is a ticking time bomb for economic growth," Chris Rupkey, chief economist at MUFG in New York, told Reuters. "Today's JOLTS data bring a September meeting balance sheet unwind announcement a little closer to reality."

In Europe, the Stoxx 600 Index finished the session with a gain of 0.2 percent from the previous close. The UK’s FTSE 100 Index increased 0.1 percent, France’s CAC 40 Index rose 0.2 percent, while Germany’s DAX Index added 0.3 percent.

(BusinessDesk)



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