TORONTO – Stock markets nosedived Thursday as investors continued moving into gold amid escalating political tensions between the United States and North Korea.
The Toronto Stock Exchange’s S&P/TSX composite index fell 143.08 points to 15,074.25, with nearly all of its sectors moving lower.
In New York, the Dow Jones industrial average plunged 204.69 points to 21,844.01, while the S&P 500 index dropped 35.81 points to 2,438.21 and the Nasdaq composite index slid 135.46 points to 6,216.87.
After seeming to shrug off the heated rhetoric between U.S. President Donald Trump and North Korea over the last couple of days, investors are becoming more wary as the standoff between the two countries continues ratcheting up, said Michael Currie, vice-president of TD Wealth Private Investment Advice.
Strong gains in New York, where the Dow saw repeated record highs up until three day ago, had kept investor optimism high when news of the conflict first broke, Currie said.
“But now we’re seeing increasing rather than diminishing tensions,” he said. “I think a few investors are capitulating to it.”
Earlier on Thursday, North Korea revealed a plan to launch ballistic missiles toward a major U.S. military hub in the Pacific. Later in the day, President Trump warned the regime to “get their act together” or face extraordinary trouble.
The Vix, a measure of how much volatility investors expect in stocks, jumped 34.8 per cent, the biggest increase since May.
The price of gold also surged for the second day in a row as the December bullion contract advanced US$10.80 to US$1,290.10 an ounce. The precious metal is often seen as a safe haven for investors during times of uncertainty.
The Canadian dollar was trading at an average price of 78.67 cents US, down 0.04 of a U.S. cent.
Elsewhere in commodities, the September crude contract advanced 20 cents to US$49.76 per barrel and the September natural gas contract was up seven cents to US$2.95 per mmBTU. The September copper contract was down two cents to US$2.91 a pound.
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