Wall Street to open lower
as North Korea missile test rattles investors
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[August 29, 2017]
By Sruthi Shankar
(Reuters) - U.S. stocks were set to open
sharply lower on Tuesday as North Korea's missile test over Japan
escalated tensions with the United States, and President Donald Trump
warned that "all options are on the table".
The Dow e-minis were down 108 points, while the Nasdaq 100 e-minis
<NQc1> were down 46 points.
The missile, tested early on Tuesday, flew over Japan and landed in the
Pacific about 735 miles off the northern region of Hokkaido, a rare
occasion when North Korea fired projectiles over mainland Japan.
"Threatening and destabilizing actions only increase the North Korean
regime's isolation in the region and among all nations of the world. All
options are on the table," Trump said in a statement.
Earlier this month, North Korea threatened to fire four missiles into
the sea near the U.S. Pacific territory of Guam after Trump warned that
the reclusive country would face "fire and fury" if it threatened the
"It is a risk-off mode and ... investors are either staying on the
sidelines for this dust to settle or booking their gains," said Naeem
Aslam, chief market analyst at Think Markets UK.
Investors scampered to safe-haven assets, with gold <XAU=> jumping to
its highest since November and the benchmark U.S. 10-year treasury yield
<US10YT=RR> dipping to its lowest since the day after the Nov. 8 U.S.
The news also jolted the CBOE Volatility index <.VIX>, which rose 1.94
points to 13.26.
Investors have been pouring into exchange-traded products (ETPs) linked
to Vix, particularly <UVXY.K> and <TVIX.O>, that were up about 13
percent and were among the most active issues in premarket trading.
iShares MSCI Emerging Markets ETF <EEM.P> was down nearly 1 percent.
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The S&P and the Dow ended little changed on Monday, with energy and bank shares
lower as Tropical Storm Harvey crippled the U.S. energy hub in Texas.
"The effects of Hurricane Harvey are still going to remain prominent as the
flooding continues. It is going to have some serious economic impact and just
how large that would be is still unclear," Aslam said.
At 8:30 a.m. ET (1230 GMT), Dow e-minis <1YMc1> were down 108 points, or 0.5
percent, with 51,360 contracts changing hands.
S&P 500 e-minis <ESc1> were down 13.25 points, or 0.54 percent, with 363,037
Nasdaq 100 e-minis <NQc1> were down 46 points, or 0.79 percent, on volume of
U.S.-listed shares of gold miners including Kinross Gold <KGC.N> and Harmony
Gold <HMY.N> were up about 5 percent in premarket trading.
Dow component Nike <NKE.N> fell 2.31 percent after Morgan Stanley cut its price
target by $4 to $64.
Finish Line <FINL.O> plunged about 29 percent after the sporting goods retailer
cut its full-year profit forecast and adopted a poison pill.
Electronics retailer Best Buy <BBY.N> were down about 1 percent despite raising
its full-year revenue forecast.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)
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