Economy

NZX50 drops 1% as North Korean tension escalates

NZX50 drops 1% as North Korean tension escalates

The VIX, a measure of how much volatility investors expect in stocks, jumped 10.4 percent. Shares of Macy's lost 10% and Kohl's fell 5.8%.

However, the market changed its direction after President Trump warned North Korea that threats will be "met with fire and fury". It is now on track for its biggest weekly drop since the week before the November 8 US presidential election.

Escalating tensions around Pyongyang's nuclear ambitions sent a shiver through markets worldwide and pushed the dollar to below 109.7 yen in afternoon forex trade to an eight-week low against the safe haven currency, piling more pressure on Japanese stocks.

Thursday's selling in the USA extended to global markets Friday.

Tropical depression forms off the East Coast
The system is expected to head north along the coast before peeling off into the Atlantic early next week. The hurricane center's forecast said Jova would continue to weaken and likely dissipate Sunday.

High-flying technology names suffered outsized losses on the day, with Apple falling 3.2 percent, Amazon 2.6 percent and Facebook 2.2 percent. "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". The index - which last week hit 22,000 for the first time - closed at 21,844.

Avis Budget Group Inc. slumped 9.9 percent after the vehicle rental company cut its guidance following a weak second quarter. The stock fell $4.15 to $102.83.

Shares of Snapchat parent Snap Inc.(SNAP) slid 11% a day after the company's earnings missed forecasts (http://www.marketwatch.com/story/snap-ceos-promise-cant-overcome-declining-ad-rates-stock-heads-toward-new-lows-after-earnings-2017-08-10), and the social-messaging company disclosed that average ad prices fell in the second quarter.

Biotechnology, tobacco, and transportation stocks also saw considerable strength, while steel stocks extended a recent move to the downside.

Conte regrets Matic sale to Manchester United
The midfielder rejoined Jose Mourinho for £40million, opting to leave last season's Premier League champions for Old Trafford. "Matic knows very well what I think about him", Conte told Sky Sports News during the Premier League launch.

The utilities index .SPLRCU , often seen as a bond proxy because of its companies' slow reliable growth and high dividends, was the only S&P sector that ended the day up, showing a 0.25 per cent gain. The consumer discretionary index was one of its biggest losers with a 0.47 per cent drop.

Shares of health care equipment and services company Henry Schein Inc. declined amid a broader slide by health care stocks.

Stocks ended more than one percent down in Seoul while the won slumped to a three-week low against the dollar as the United States president and South Korea's volatile neighbour dramatically ramped up their war of words.

Benchmark U.S. crude fell 97 cents, or 2 percent, to $48.59 a barrel on the New York Mercantile Exchange. Brent crude, the global standard, lost 23 cents to $52.14 a barrel in London. Silver gained 14 cents to $16.39 an ounce. The September copper contract was down two cents to US$2.91 a pound.

Ambac Financial Group's (NASDAQ:AMBC) "Buy" Rating Reiterated at BTIG Research
Finally, Wells Fargo & Company MN boosted its stake in Ambac Financial Group by 83.0% in the first quarter. AQR Capital Management LLC increased its position in Ambac Financial Group by 107.3% in the first quarter.

In Europe, Germany's DAX rose 0.3 percent, while France's CAC 40 added 0.2 percent. Britain's FTSE 100 sank 1.3 percent.


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