USA stocks snap 3-day losing streak in roller coaster week

GBP  JPY 4 Hours Chart

President Donald Trump warned North Korea again on Thursday not to strike Guam or USA allies, saying his earlier threat to unleash "fire and fury" on Pyongyang if it launched an attack may not have been tough enough.

With the tense mood pushing European shares down for a third day and Wall Street set to fall again, global stocks were on course for their worst week since Donald Trump won November's election.

At 9:34 a.m. ET (1334 GMT), the Dow Jones Industrial Average was up 54.06 points, or 0.25%, at 21 898.07, the S&P 500 was up 5.23 points, or 0.21%, at 2 443.44.

Trump's words were in response to North Korea threatening to attack US territory Guam. "You're less than 2 percent off the high for the S&P heading into a weekend where uncertainty with North Korea still lingers".

The rhetoric, which began late Tuesday and continued into Friday, interrupted stocks' march higher and cracked the calm that has enveloped the market for months.

"If the USA and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so", the editorial's authors said. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.47 percent lower.

In an apparent response to Trump's tweet, a statement issued by North Korea's official KCNA news agency claimed the president is "driving the situation on the Korean peninsula to the brink of a nuclear war".

Investors React to Trump's North Korea Threats
The dollar notched a two-month trough on the safe-haven Japanese yen and was last down 0.3 percent at 109.99. The Russell 2000 index of smaller-company stocks picked up 1.69 points, or 0.1 percent, to 1,374.23.

"Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay.

Many world stock markets have hit record or multiyear highs in recent weeks, leaving them vulnerable to a sell-off, and the tensions over North Korea proved to be the trigger.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds should a crisis materialize.

Copper traded at $2.912, down 0.25%, while natural gas tacked on 0.23% to $2.991.

The dollar was further weighed down on Friday by the soft United States inflation data.

The smaller than expected increase in consumer prices has led to optimism that the Federal Reserve will not be in a hurry to raise interest rates.

The dollar index fell 0.32 percent, with the euro up 0.42 percent to $1.1819.

USA stocks fall again on North Korea tensions
The technology sector was the biggest weight on the S&P 500 index with a 1.9-percent drop. Brent crude, used to price global oils , added 21 cents to $52.91.

By the end of the day almost $1 trillion in equity had been lost globally.

On the currency front, the U.S. dollar is trading at 108.82 yen compared to the 109.20 yen it fetched at the close of NY trading on Thursday. In bond markets, 10-year US Treasuries and Germany's ultra-safe government bonds were trading at their highest prices since June.

"There are four more [inflation] prints between now and the December FOMC meeting and we expect the Fed to remain data-dependent, if a touch more cautious", TD Securities said in a research note.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories, leaving prices volatile.

The 30-year bond last /32 in price to yield 2.7933 percent, from 2.794 percent late on Thursday.

Benchmark U.S. crude rose 23 cents to settle at $48.82 a barrel on the on the New York Mercantile Exchange.

US, France pledged to work to denuclearize North Korea
All parties must assure North Koreans they we will forego any military action against them if North Korea remains peaceful. It prompted Mr Trump to warn that he would unleash "fire and fury" on North Korea if it did not stop its threats.

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