Stocks Dip After North Korean Missile Test and Storm Worries

NEW YORK (AP) —
stocks, markets, wall street
The flag of Texas flies outside the New York Stock Exchange on Tuesday. (AP Photo/Peter Morgan)

U.S. stocks are slightly lower Tuesday as investors buy high-yielding stocks as well as bonds and gold. They are looking for safer assets after North Korea’s launch of a midrange ballistic missile that crossed over northern Japan and fell into the Pacific Ocean. The dollar is down to its lowest level in two and a half years, which is helping companies that do a lot of business overseas. Stocks in Europe are falling sharply.

KEEPING SCORE: After sharp losses in early trading, the Standard & Poor’s 500 index fell 2 points, or 0.1 percent, to 2,441 as of 12 p.m. Eastern time. The Dow Jones industrial average bounced back from a 134-point loss and gained 11 points, or 0.1 percent, to 21,820. The Nasdaq composite added 8 points, or 0.1 percent, to 6,291. The Russell 2000 index of smaller-company stocks sank 4 points, or 0.3 percent, to 1,378. About three-fifths of the stocks on the New York Stock Exchange traded lower.

MISSILE NEWS: South Korea’s Joint Chiefs of Staff said the North Korean missile traveled over the northern Japanese island of Hokkaido. It seemed designed to show that North Korea can back up a threat to target the U.S. territory of Guam while also establishing a potentially dangerous precedent that could see future missiles flying over Japan.

The price of gold climbed $7.80 to $1,323.10, its highest price in almost a year. Bond prices jumped and yields sank. The yield on the 10-year Treasury note fell to 2.12 percent from 2.16 percent. Lower bond yields translate to lower interest rates, and banks fell as investors expected them to make less money from lending. Citigroup shed 76 cents, or 1.1 percent, to $67.05 and U.S. Bancorp lost 60 cents, or 1.2 percent, to $51.36.

The dollar fell, with the ICE U.S. Dollar Index reaching to its lowest level in two and a half years. The dollar slid to 108.94 yen from 109.09 and compared to the euro $1.2032 from $1.1979. The European currency is at its highest level in more than two years, as European Central Bank leaders do not seem poised to take action about its strength.

BLOW THE WHISTLE: Finish Line forecast weak second-quarter results and the retailer cut its forecasts for the rest of the year. It said discounts on shoes are growing, which is hurting its profit margins. Its stock tumbled $2.02, or 19.4 percent, to $8.40. It was just the latest in a series of discouraging reports from sporting goods companies this month. Under Armour lost 62 cents, or 3.7 percent, to $16.31 and Foot Locker shed 56 cents, or 1.6 percent, to $35.14. Nike lost $1.42, or 2.7 percent, to 52.31.

Electronics retailer Best Buy had a solid second quarter and raised its forecasts for the year, but it wasn’t enough to send the stock higher. Its shares fell $6.76, or 10.8 percent, to $55.71. Despite that loss, the stock is up 31 percent in 2017 and it’s been setting all-time highs.

STORM DAMAGE: The Gulf Coast region continued to absorb heavy rains from Tropical Storm Harvey. More than 30 inches have fallen in some areas, leading to widespread flooding, and close to two feet more could fall over the next few days. Tens of thousands of people are seeking refuge in shelters.

On Wall Street, energy companies are falling with the price of crude oil. Companies that drill for oil in the Gulf or onshore in Texas are falling the most as investors worry about potential lost production. Anadarko Petroleum gave up 98 cents, or 2.4 percent, to $40.29 and Apache slumped 88 cents, or 2.2 percent, to $38.47.

Benchmark U.S. crude gave up 74 cents, or 1.6 percent, to $45.83 a barrel in New York. Brent crude, the international standard, fell 13 cents to $51.29 a barrel in London. Gasoline prices continued to rise.

Insurers continued to fall as investors wondered if Tropical Storm Harvey will lead to big losses. Metlife fell 95 cents, or 2 percent, to $46.62 and Assurant declined $2.09, or 2.2 percent, to $93.35.

GAINERS: Industrials rose, including defense contractors. Raytheon climbed $3.18, or 1.8 percent, to $181.42 while Lockheed Martin added $4.22, or 1.4 percent, to $307.83. General Dynamics picked up $2.89, or 1.5 percent, to $200.76.

Technology companies were also up. Apple rose $1.24 to $162.71 and chipmaker Applied Materials advanced 20 cents to $43.83.

SHRINKING BOARD: Consulting company Advisory Board is climbing after it confirmed recent rumors that it’s selling its health care business to UnitedHealth’s Optum unit and its education business to Vista Equity Partners. The company said it expects $2.58 billion in proceeds after taxes. Advisory Board gained $3.05, or 6.1 percent, to $52.90.

OVERSEAS: Germany’s DAX slid 1.4 percent and the CAC 40 in France fell 0.9 percent. The FTSE 100 index in Britain lost 0.8 percent. Asian indexes had a smaller reaction. In Japan, the benchmark Nikkei 225 slid 0.5 percent and South Korea’s Kospi lost 0.2 percent. In Hong Kong, the Hang Seng shed 0.1 percent.

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