Geopolitical uncertainty reigned for a third day in a row as President Trump and North Korea traded escalating threats, though no concrete steps were made toward conflict.
The Dow Jones Industrial Average was down 0.9%, around 204 points lower and retreating below its 22,000 level.
The S&P 500 fell 1.45% and was trading at session lows. The S&P 500 has fallen for three straight days, the longest losing streak of the month. It was its worst daily performance since May 17. Thursday's losses pushed the S&P 500 into the red for the month. The Nasdaq slid 2.1%. The Volatility Index increased 45% to 16.12.
Tensions between North Korea and the United States have intensified in recent days after Trump warned of severe retribution should the authoritarian state proceed with any more missile tests or threats. In a statement delivered at his Bedminster, N.J., golf club on Tuesday, Trump said, "North Korea best not make any more threats to the U.S. They will be met with fire and fury like the world has never seen." Trump tweeted Wednesday morning that one of his first orders as president was to "renovate and modernize" the nuclear arsenal.
Trump followed up on his threats Thursday with fresh comments in Bedminster. He told reporters, "North Korea better get their act together or they're going to be in trouble like few nations have been in trouble before." He also said his previous "fire and fury" language may not have been strong enough.
Trump's rhetoric has escalated since reports broke at the beginning of the week that North Korea had successfully produced a nuclear warhead that could be fitted inside its missiles. The U.N. Security Council unanimously voted on Saturday to impose new sanctions on North Korea after several missile tests.
In more back-and-forth between Trump and North Korea, Pyongyang General Kim Rak Gyom, leader of the country's strategic forces, said that "sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on [Trump]." The general also outlined plans to launch four Hwasong-12 ballistic missiles to strike the sea around the U.S. territory of Guam.
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Plans are being drawn up and will be ready by the middle of August, North Korea said. The country previously threatened a further "all-out war, wiping out all the strongholds of enemies, including the U.S. mainland" in a government statement.
The iShares MSCI Emerging Markets Index ETF (EEM) - Get Report , an index tracking equity-market performance in emerging markets, was lower on Thursday afternoon. The index declined more than 2%, its worst daily performance since mid-December.
Meanwhile, U.S. inflation trends remained weak in July, with producer prices falling 0.1%, according to the Bureau of Labor Statistics. The decline was the largest since August 2016, and economists had expected 0.1% increase. Core prices, which exclude food and energy, fell 0.1%, the first drop of the year.
Separately, jobless claims in the U.S. rose in the past week, though held close to multi-year lows. The number of new claims for unemployment benefits increased by 3,000 to 244,000. The less-volatile four-week average fell by 1,000 to 241,000. Continuing jobless claims fell by 16,000 to 1.95 million.
Elsewhere, New York Federal Reserve President William Dudley said in a speech to economists that inflation could make a rebound in coming months amid a tighter labor market and a weaker dollar. Dudley said "our outlook anticipates a continued moderate growth trend, with some further strengthening in the labor market and an increase in inflation over the medium term toward our objective of 2%." However, he said inflation might not reach that target for at least another six months.
Blue Apron Holdings Inc. (APRN) - Get Report fell nearly 18% on Thursday after reporting earnings for the first time since going public on June 29. The meal-kit delivery services reported a loss of 47 cents a share, steeper than consensus of 27 cents. Revenue exceeded estimates, rising 18% to $238.1 million. The number of customers rose by 23% from a year earlier, though fell by 9% from the first quarter.
Macy's Inc. (M) - Get Report declined more than 10% despite topping quarterly earnings and sales estimates. Net income rose to 38 cents a share from 3 cents in the year-ago quarter. Adjusted profit of 48 cents a share exceeded estimates by 2 cents. Sales of $5.55 billion was slightly higher than expected. Same-store sales for owned locations declined 2.8%. The retailer anticipates full-year adjusted earnings of $2.90 to $3.15 a share, falling short of $3.27 consensus.
Kohl's Corp. (KSS) - Get Report dropped 5.8% after Macy's issued a disappointing outlook. Shares were higher earlier after a better-than-expected quarter. Adjusted profit of $1.24 came in higher than estimates of $1.19. Revenue slipped 1% to $4.14 billion, but came in slightly higher than consensus. CEO Kevin Mansell said foot traffic had "accelerated" over the second quarter.
Brinker International Inc. (EAT) - Get Report rose after a better-than-expected fourth quarter. The parent of Chili's restaurants earned $1.09 a share over the quarter, a nickel above estimates. Revenue fell 8% to $810.66 million, but came in $1 million higher than anticipated.
Perrigo Co. PLC (PRGO) - Get Report rose almost 16% after exceeding quarterly expectations. Adjusted earnings of $1.22 a share soared past consensus by 29 cents. Revenue sank 7.5% to $1.24 billion, but beat estimates by $60 million. The drugmaker said it progressed in its cost-cutting program designed to deliver annual cost savings of more than $130 million by mid-2018.
Twenty-First Century Fox Inc. (FOXA) - Get Report reported a mixed quarter. The media empire earned an adjusted earnings of 36 cents a share on sales of $6.75 billion. Economists expected 35 cents a share on $6.77 billion. Domestic cable advertising increased 6% with the firing of long-time host Bill O'Reilly not hurting ratings at Fox News. Executive co-chairman Lachlan Murdoch said the cable network was the most watched over the past year.
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