North Korea Tensions Hit Global Stock Markets

Currently, the major averages remain in positive territory but off their best levels of the day.

The Standard & Poor's 500 index fell 7 points, or 0.3 percent, to 2,467.

Tensions between the United States and North Korea continued to simmer early Friday.

"I will tell you this, North Korea better get their act together or they're going to be in trouble like few nations ever have been in trouble in this world", Trump said.

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.

The remarks followed a new report asserting that USA intelligence has assessed that Pyongyang has successfully produced a nuclear warhead that can fit inside its missiles.

A notable decline by Disney (DIS) is weighing on the Dow, with the entertainment giant slumping by 3.9% on the day.

Shares of Dow component Walt Disney were down 4.94 percent in premarket trading after the company said it will stop providing new movies to Netflix and launch its own streaming service.

Economic data showed US worker productivity rose more than expected in the second quarter but the trend remained weak.

The report said labor productivity climbed by 0.9% in the second quarter after inching up by a revised 0.1% in the first quarter. Economists had expected prices to rise by 0.2%. "When earnings are not beating expectations there's a sell off in the companies, and we're just not seeing that money reinvested because of the geopolitical risks".

'Rising tensions on the Korean peninsula are nothing new, they have been a staple for investors for several years now, but this flare-up had the potential for a policy misstep, more so because of the inexperience of the person occupying the White House, and a tendency to conduct policy by way of tweet and press conference, ' he said. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman were all up, lifting the Dow Jones U.S. defense index 1.17 percent. The index has slid to its lowest intraday level in nearly eight months.

On the other hand, gold stocks have shown a strong move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 1.5%. Prices for bonds and gold headed higher.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday.

The pan-European STOXX 600 was down 0.7% at closing, France's CAC 40 fell 1.4% after a auto hit a group of soldiers in Paris in what is thought to have been a deliberate act, and a fall in bond yields saw Germany's DAX down 1.1%.

Markets opened down across Europe, with the FTSE 100 losing 44 points in early trading hitting 7,499.42. The yield on the 10-year Treasury note held steady at 2.26%.

Related News: