Geopolitical Concerns Lead To Weakness On Wall Street

Dow Jones Industrial Average

U.S. stocks clawed back losses late on Wednesday as investors appeared to brush off geopolitical concerns after falling in the wake of U.S. President Donald Trump's "fire and fury" warning to North Korea.

The Dow Jones Industrial Average .DJI was down 82.37 points, or 0.37 percent, to 22,002.97, the S&P 500 .SPX had lost 8.34 points, or 0.34 percent, to 2,466.58 and the Nasdaq Composite .IXIC had dropped 38.99 points, or 0.61 percent, to 6,331.47. They hit 2.212 percent earlier, the lowest level since June 28 and almost 7 basis points lower than Tuesday's close, Reuters data showed.

Trump directed his stern comment towards North Korea just hours after it was revealed by the Washington Post that Pyongyang had successfully created a miniaturized nuclear weapon designed to fit inside its missiles.

Officials in North Korea said they were "carefully examining" a strike on Guam, which is home to around 163,000 people and two USA military installations and threatened a further "all-out war wiping out all the strongholds of enemies, including the US mainland" in a government statement.

USA 30-year bond yields, which move inversely to prices, also hit a six-week trough, while yields on US 2-year notes matched a low hit four weeks ago. On Monday, the S&P 500 and Dow closed at record highs. USA stock indexes edged lower in early trading Tuesday, Aug. 8, 2017, pulling back from the markets most recent record highs.

The weakness on Wall Street reflects geopolitical concerns amid a continued increase in tensions between the U.S. and North Korea.

After a dip of as much as 0.52 percent earlier in the day, investors appeared to take some comfort in Tillerson's comments, said Richard Steinberg, managing director at HighTower Advisors in NY.

The S&P hasn't moved more than 0.5 percent in one day since July and has fallen more than 1 percent only twice this year. It fell 19 cents, or 0.4 percent, to $49.39 per barrel Monday in NY. Yields fall when prices rise. Japan's Nikkei 225 Index tumbled by 1.3 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

The benchmark 10-year yield jumped to trade at 2.28% after the jobs openings and labour turnover survey showed a record number of job openings for June. September-dated crude futures settled up 0.8%, or 39 cents, at $49.56 per barrel.

Politics lifted USA defense stocks. The euro edged down to $1.1726 from $1.1751.

Global markets were sharply lower on Wednesday.

MARKETS ABROAD: In Europe, Germany's DAX rose 0.3%, and France's CAC 40 gained 0.2%.

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