U.S. Stocks Slip as North Korea Tensions Persist
By Justin Yang and Akane Otani
-- U.S., European, Asian stocks lower
-- Prices volatile during low-volume summer session
-- Blue Apron shares fall after earnings report
Stocks slid for a third straight day, as disappointing earnings and rising tensions between North Korea and the U.S. diminished investors' appetite for risk.
The Dow Jones Industrial Average fell 131 points, or 0.6%, to 21916 shortly after the opening bell. The S&P 500 shed 0.8% and the Nasdaq Composite lost 1.3%.
The Stoxx Europe 600 fell 0.9%, while stocks in Asia mostly ended lower.
An exchange of threats between North Korea and the U.S. has jolted what has often been a quiet period of summer trading. Stocks have retreated in recent sessions while assets perceived as havens, such as gold, the Japanese yen and U.S. government bonds, have strengthened.
Meanwhile, the CBOE Volatility Index, which measures investors' expectations for swings in the S&P 500, has climbed. The VIX was recently up 34% after jumping more than 15% at one point on Wednesday.
Still, even with the week's moves, U.S. stocks remain near their all-time highs. After what has largely been an uninterrupted rally, many investors and analysts have cautioned that a stock pullback is overdue.
"You have these periods of large runs and that's often followed up by pullbacks and that's what we're seeing," said William Hamlyn, senior investment analyst at Manulife Asset Management.
Downbeat corporate earnings weighed on major indexes on Thursday.
Blue Apron Holdings lost 15% after it said it lost more money than analysts had expected in its first quarterly earnings report since going public in June.
Shares of retailers slid, weighing on major indexes, after department stores Macy's and Kohl's both reported same-store sales continued to decline in the second quarter. Macy's lost 4.7% and Kohl's fell 9.1%.
Chip maker Nvidia, which is expected to report earnings after the close, led declines in the S&P 500 tech sector.
Strong earnings this season have helped bolster global markets and the economy should grow in the second half of the year, said William Delwiche, managing director and investment strategist at Baird.
"We have the international economy doing quite well and some evidence that the U.S. economy can get back in gear and accelerate a little bit," he said.
Haven assets, which were a bright spot Wednesday as stocks fell, extended their gains Thursday.
Government bonds rose, with the yield on the 10-year U.S. Treasury note falling to 2.211%, according to Tradeweb, from 2.246% on Wednesday.
Gold, another asset that tends to benefit from rising uncertainty, rose 1.1%, to $1293.40 a troy ounce, while the Japanese yen rose 0.6% against the dollar.
Earlier, Hong Kong's Hang Seng Index finished down 1.1%, while the Shanghai Composite Index fell 0.4% and Japan's Nikkei Stock Average lost less than 0.1%.
Write to Akane Otani at [email protected]