U.S. stocks indices slightly up as North Korea threat recedes - market wrap

The dollar rallied and U.S. stocks closed mixed, halting a two-day advance, as the threat of war with North Korea diminished. Treasuries extended losses after U.S. retail sales exceeded forecasts last month, boosting speculation that the Federal Reserve might raise interest rates again this year.

The S&P 500 Index and Nasdaq Composite Index drifted lower, while the Dow Jones Industrial Average rose slightly for a third straight day. Meanwhile, traditional havens such as gold and the yen slumped. Oil shrugged off early losses to post a gain. The CBOE Volatility Index, also known as the VIX, continued to tumble amid a return to calm in the stock market.

Japan’s currency -- a haven in times of global tension -- slumped after a North Korean media report indicated that dictator Kim Jong Un had decided not to launch a threatened missile attack on Guam. In addition, South Korean President Moon Jae-in vowed to avoid a conflict at any cost.

The S&P 500 and Nasdaq Composite closed down 0.1 percent. The Dow gained five points, or less than 0.1 percent, and the Russell 2000 Index dropped 0.8 percent. The Stoxx Europe 600 Index increased 0.1 percent. The MSCI All-Country World Index declined 0.1 percent. Germany’s DAX Index jumped 0.1 percent. The U.K.’s FTSE 100 Index surged 0.4 percent.

Currencies - the Bloomberg Dollar Spot Index jumped 0.4 percent. The euro fell 0.4 percent to $1.1739, the lowest in three weeks. The British pound dipped 0.8 percent to $1.2865. The Japanese yen decreased 0.8 percent to 110.54 per dollar, the biggest decline since July 3.

Gold declined 0.7 percent to $1,273.09 an ounce. West Texas Intermediate crude rose less than 0.1 percent to $47.61 a barrel after falling 2.5 percent on Monday.

Japan’s Topix index finished the day 1.1 percent higher and Australia’s S&P/ASX 200 Index gained 0.5 percent at the close. Hong Kong’s Hang Seng index dropped 0.3 percent as the Shanghai
Composite Index rose 0.4 percent.

Markets in South Korea and India are closed Tuesday for holidays.

Source: Bloomberg Pro Terminal

Jr Trader Ivan Ivanov

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