U.S. Stocks Slip as North Korea Tensions Persist
By Justin Yang and Akane Otani
-- Major U.S. stock indexes on course for a third straight day of declines
-- Shares of Macy's, Kohl's slide after quarterly earnings reports
-- Havens like Treasurys, gold extend gains
Stocks slid for a third straight day, as disappointing earnings and an exchange of threats between North Korea and the U.S. pushed investors out of risky assets.
The rising tensions have jolted what has often been a quiet period of summer trading. Stocks have retreated while assets perceived as havens, such as gold, the Japanese yen and U.S. government bonds, have strengthened.
The Dow Jones Industrial Average fell 131 points, or 0.5%, to 21935 on Thursday. The S&P 500 shed 0.9% and the Nasdaq Composite lost 1.4%.
As stocks have fallen, 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 was 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 reports also weighed on major indexes.
Shares of Blue Apron Holdings fell 16% after it said it lost more money than analysts had expected in its first quarterly earnings report since going public in June.
Retailers slid after department stores Macy's and Kohl's both reported same-store sales continued to decline in the second quarter. Shares of Macy's lost 10% and Kohl's fell 6.6%.
Chip maker Nvidia, which is expected to report earnings after the close, fell 3.2% and was one of the biggest decliners 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.
Assets that tends to benefit from rising uncertainty extended their gains Thursday.
U.S. government bonds strengthened, with the yield on the 10-year U.S. Treasury note falling to 2.229%, according to Tradeweb, from 2.246% on Wednesday.
Gold prices rose 0.9%, to $1290.70 a troy ounce, while the Japanese yen rose 0.6% against the dollar.
The Stoxx Europe 600 fell 1%, while stocks in Asia mostly ended lower. 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]