Global markets jarred by North Korea fears

European Shares Plummet

USA stock indexes opened higher for the first time in four days on Friday after tepid data pointed to benign inflation that could make the Federal Reserve cautious about raising rates again this year, even as concerns lingered over rising tensions between the United States 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.

"As a portfolio manager, you say, 'Do I think we'll get a war out of this?'" said Torsten Slok, chief global economist at Deutsche Bank, referring to the back and forth between North Korea and President Donald Trump.

"Since these are the stocks that have been in the spotlight the most, they tend to have the most volatility upwards and downwards", said Chris Bertelsen, chief investment officer of Aviance Capital Management in Sarasota, Florida. Macy's sank 10.3 percent and Kohl's lost 5.8 percent. "I think a few investors are capitulating to it".

At 11:03 a.m. ET (1503 GMT), the Dow Jones Industrial Average was down 110.36 points, or 0.5 percent, at 21,938.34, the S&P 500 was down 19.12 points, or 0.77 percent, at 2,454.90.

The last time the S&P closed down more than 1 percent was May 17 when it fell 1.8 percent.

All the 11 major S&P indexed were lower, with technology sector's 0.62% leading the decliners.

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Gold hit a two-month high of US$1,278 an ounce amid the nervousness.

Retailers' results are being keenly watched by investors to gauge the companies' strategy to counter No. 1 online retailer Amazon.com's growth.

Macy's (M.N) shares closed down 10.2 percent and Kohl's (KSS.N) fell nearly 6 percent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off.

In other news, U.S. wholesale inflation dropped in July, the first contraction in almost a year and another data point that could weaken the case for the Federal Reserve to raise the benchmark interest rate again later this year. Hong Kong's Hang Seng Index plunged by 2 percent, while South Korea's Kospi Index slumped by 1.7 percent.

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

Selling was broad. Declining issues outnumbered advancing ones on the NYSE 6-to-1; on Nasdaq, a 3.60-to-1 ratio favored decliners. On the Nasdaq, 1,440 issues fell and 1,386 advanced.

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