Korean shares extend losses amid escalating tensions over N. Korea

At 9:38am ET the Dow Jones Industrial Average was down 85.43 points or 0.39% at 21,963.27. The AFP

Political tensions continue to weigh on world stocks

US stocks rose Friday but still notched their biggest weekly loss in months, as investors were shaken by disappointing earnings results and an escalation of threats between the USA and North Korea.

His comments came in response to North Korea's threat to fire ballistic missiles toward the USA territory of Guam, which is home to US bombers and other strategic assets.

Safe havens benefited from the move away from stocks - gold rising again to around $1,279 an ounce after surging 1.3 percent Wednesday - but other risky assets such as oil and copper held their price.

U.S. President Donald Trump told reporters at his golf club in Bedminster, New Jersey, on Thursday that he will respond forcefully to any North Korean attack on the U.S. or its allies.

"If the market truly believed the North Korea reaction was imminent, I think it would be down a lot more than it is", said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

The Dow Jones Industrial Average fell 0.9 percent to end at 21,844.01, the only close below 22,000 since breaking through that level for the first time August 2.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, rose to a near three-month high of 15.36.

Retail results are also on investors' mind as the second-quarter earning season winds down.

The Nasdaq Composite was down 68.30 points, or 1.08 percent, at 6,284.03.

Frankfurt's DAX 30 was 0.4 per cent lower at 11,961.60 points.

Shares of Macy's tumbled 8.3 percent and Kohl's 7.3 percent after the department store operators reported a drop in quarterly same-store sales that stoked concerns that their turnaround may still be a long way off. Hong Kong's Hang Seng Index plunged by 2 percent, while South Korea's Kospi Index slumped by 1.7 percent.

On the USA economic front, a report released by the Labor Department showed a modest uptick in consumer prices in the U.S.in the month of July.

US government bonds strengthened Friday as soft inflation data led investors to further scale back expectations for interest-rate increases from the Federal Reserve.

Blue Apron shares hit a record low at US$5.03 after the meal-kit delivery service provider reported a bigger-than-expected loss in its first quarterly report as a public company.

Perrigo surged 17.6 percent after the drugmaker raised its full-year adjusted profit forecast.

Declining issues outnumbered advancers on the NYSE by 1,847 to 678. On the Nasdaq, 1,440 issues fell and 1,386 advanced.

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