US open: Stocks slip as traders get first chance to react to events in Korea
Wall Street's main stockmarket averages were lower at the start of the shortened trading week as markets tried to guess the endgame of the tensions on the Korean peninsula, with some traders in the US getting their first chance to react to news of North Korea's hydrogen bomb test over the Memorial Day weekend.
As of 1640 BST, the Dow Jones Industrial Average was down by 0.69% or 150.97 points at 21,834.58, alongside a 0.53% or 13.20 point drop for the S & P 500 to 2,463.56 and a 0.63% or 40.70 point fall in the Nasdaq Composite to 6,394.59.
In parallel, the yield on the benchmark 10-year US Treasury note retreated eight basis points to 2.09%, alongside a 0.75% rise in front month gold futures om COMEX to $1,340.30/oz..
From a sector standpoint, the worst performance was being seen in the following industrial groups: Recreational services (-2.88%), Mortgage finance (-2.54%) and Elctronic office equipment (-2.14%).
Richard Perry at Hantec Markets said: "As the US returns from Labor Day, market sentiment remains cautious with tensions over North Korea still at the forefront of traders' minds. The US is looking for the UN to take a hard line with North Korea, whilst in the immediate proximity South Korea continues to prepare for military manoeuvres. Markets retain their safe haven bias from trading yesterday. This means that assets such as gold, the yen and the Swiss franc are all still performing well."
In fresh Korea news, even ahead of next National Congress of the Chinese Communist Party, in October, the South China Morning Post cited diplomatic analysts according to whom Beijing might be open to cutting energy supplies to Pyongyang, albeit not by enough to topple the regime.
To take note of as well, in remarks at the Economic Club of Chicago, Fed governor Lael Brainard indicated that recent low readings on inflation might not be transitory, which would require a slower pace of interest rate increases.
Meanwhile, on the corporate front, stock of United Technologies was lower after the company agreed to buy airplane parts maker Rockwell Collins for $23bn.
US-listed shares of Cellectics were sharply lower after the Food and Drug Administration said the company had to put a cancer drug trial on hold.
Going the other way, stock of Insmed skyrocketed after the firm announced a phase 3 trial for rare lung disease had met its primary endpoint.
Results are due from Hewlett Packard after the market close.