All three major equity benchmarks were stumbling firmly lower on Thursday, with the trifecta of indexes on track to fall in three consecutive sessions in unison for the first time since mid April amid persistent tensions between the U.S. and North Korea.
Dow Jones Industrial Average DJIA, -0.52% traded 130 points, or 0.6%, lower at 21,915, while the S&P 500 index SPX, -0.79% gave up 20 points, or 0.9%, to 2,462, with all of the index’s 11 sectors trading in the red, topped by falls of at least 1% in financials and technology shares, two groups with the biggest weighting in the broad-market benchmark.
The tech-laden Nasdaq Composite Index COMP, -1.06% lost 78 points, or 1.2%, to 6,277.
If all three stock gauges finish in the red on the same day for a third straight session, it would be the first time such a streak occurred since April 13, according to WSJ Market Data Group.
Geopolitical tension gained momentum on Thursday, after a North Korean army commander said, “sound dialogue” isn’t possible with President Donald Trump and “only absolute force can work on him,” according to state media. North Korea also laid out detailed plans of how it would launch a missile strike on U.S. military bases in Guam.
“Traders would require nerves of steel to start buying into the stock market now, given standoff between the U.S. and North Korea,” David Madden, market analyst at CMC Markets U.K., said in a note to clients.
Brian Nick, chief Investment Strategist for TIAA Investments, which has $938 billion in assets under management said few catalysts remain to push stocks higher after earnings season is near wrapping up, which may give added significant to concerns about unease between North Korea and the U.S.
“What will markets take a cue from in that information gap? If it’s North Korea, I don’t think this will be a fruitful period for equity investors,” Nick said.
Stocks finished off their lows, but still held on to losses Wednesday, as investors remained anxious about the U.S.-North Korea war of words and a clutch of disappointing earnings reports.
Meanwhile, traders absorbed a report on jobless claims that showed that initial claims for U.S. unemployment-insurance benefits continue to reflect a strong labor market, even as they inched slightly higher. The number of people who applied for U.S. unemployment-insurance benefits rose by 3,000 to 244,000 in the week that ended August 5, the Labor Department reported.
Economists polled by MarketWatch had expected the government to report that initial claims for regular state unemployment-insurance benefits rose 2,000 to 242,000.
Meanwhile, U.S. wholesale prices declined in July for the first time in almost a year, providing additional evidence of tepid inflation that is bedeviling the Federal Reserve.
Economic docket: New York Federal Reserve President William Dudley was slated to speak on wage inequality in the New York region at 10 a.m. Eastern.
Macy’s M, -8.29% slipped 7.1% as the retailer reaffirmed downbeat guidance, but reported second-quarter earnings and revenue that beat expectations. Net income was $116.0 million, or 38 cents per share, up from $11.0 million, or 3 cents per share, for the same period last year.
Other markets: Investors’ appetite for assets perceived as haven in times of geopolitical trouble ebbed slightly. The Swiss franc gave up some gains, as the U.S. dollar DXY, -0.04% was slightly higher across the board. Gold GCZ7, +1.08%jumped $9.60, or 0.7%, to $1,288.50 an ounce, trading at a roughly two-month high.
Oil prices CLU7, +0.14% were climbing, but data from the Organization of the Petroleum Exporting Countries showed a further rise in crude-oil production in July.