Published: Sun, August 13, 2017
Economy | By Annette Adams

Tech companies lead worst day for U.S. stock market since May

Tech companies lead worst day for U.S. stock market since May

In Europe, the Stoxx 600 index has fallen 1.2 percent for the week.

Shares of Manulife, which reported better-than-expected results, fell after the company played down talk of a John Hancock spin-off.

Benchmark U.S. crude fell 97 cents, or 2 percent, to $48.59 a barrel on the New York Mercantile Exchange.

The Nasdaq composite lost 18.13 points, or 0.3 percent, to 6,352.33. It was the biggest percentage loss since mid-June.

Data showed the number of Americans filing for unemployment benefits unexpectedly rose last week, but the underlying trend remained consistent with a tightening labor market. Hours later, North Korea said it was considering launching missiles at Guam.

Retailers Wal-Mart (WMT), Home Depot (HD), Target (TGT), Staples (SPLS), and Gap (GPS) are also among the companies due to report their quarterly results next week.

It said job cuts are likely as it looks to save £145 million a year by 2022, but it said it was too early to say how this will affect the combined workforce of almost 7,300 in the UK.

However, the market changed its direction after President Trump warned North Korea that threats will be "met with fire and fury". He also said the nuclear-armed nation should be "very, very nervous" if it even thinks about attacking the United States or its allies.

The S&P's record close on August 7 likely helped fuel its latest sell-off.

"As has been the case for much of the week, markets are heading into the weekend on a negative note as traders seek safety ahead of what could be a potential risky couple of days", noted Oanda analyst Craig Erlam. The Dow Jones industrial average fell 0.17 percent, with the tech-heavy Nasdaq composite index declining 0.28 percent. Australia's S&P/ASX 200 dropped 1.2 per cent to 5,693.10.

Mounting tensions lifted U.S. defense stocks. Its biggest drags were Priceline and Walt Disney.

Nvidia soared 55% this year after notching the biggest gains in the S&P 500 in 2016.

Most large-cap stocks were mixed across the board.

Gold, another classic safe haven asset, was trading at around $1,288 per ounce, up more than two percent this week and near a nine-week high. However, strength in the Utilities sectors limited the losses.

The CBOE Volatility Index .VIX , a barometer of expected near-term stock market volatility, closed at its highest since the US presidential election on Thursday, but was down 1.22 points at 14.82 points on Friday.

Macy's tumbled 10.2 percent after the company said its sales continued to decline in the second quarter.

Market bellwether Samsung Electronics Co. backtracked 3.49 percent, and No. 2 chipmaker SK hynix Inc. was down 4.04 percent.

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