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Futures higher as North Korea tensions ease slightly

[August 14, 2017] By Sruthi Shankar

(Reuters) - U.S. stock index futures were higher on Monday as tensions on the Korean peninsula eased slightly after key U.S. officials played down the risk of an imminent war with North Korea.

The New York Stock Exchange (NYSE) is pictured in New York City, New York, U.S., August 2, 2017. REUTERS/Carlo Allegri

Global stocks lost nearly $1 trillion in value last week after President Donald Trump warned North Korea that it would face "fire and fury" if it threatened the United States, leading to a war of words between Pyongyang and Washington.

However, U.S. officials including National Security Adviser H.R. McMaster and CIA Director Mike Pompeo played down the risk on Sunday, while South Korea's president said resolving Pyongyang's nuclear ambitions must be done peacefully.

The S&P and the Dow posted their worst weekly decline last week in nearly five months due to the tensions.

The three major U.S. stocks indexes still managed to break a three-day losing streak on Friday as the chances of another interest rate hike this year were reduced following a weaker-than-expected July consumer price data.

The Federal Reserve has a 2 percent inflation target and tracks a measure that has been stuck at 1.5 percent since May despite the labor market being near full employment.

Oil prices fell as a slowdown in Chinese refining raised concerns about demand in the world's second-biggest consumer, while an increase in U.S. drilling capacity could deepen a global supply glut. [O/R]

Tesla <TSLA.O> rose 1.57 percent after bond investors gave a $1.8 billion boost to the electric car maker's balance sheet by snapping up its first foray into the U.S. junk bond market.

Alibaba <BABA.N> was up about 2 percent after Third Point bought 4.5 million shares in the Chinese e-commerce giant.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)


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