US stocks end higher amid political tension

Dhaka,  Tue,  19 September 2017
Published : 11 Aug 2017, 11:42:21
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US stocks end higher amid political tension

US stocks end higher amid political tension
Cracks are showing in what has been a virtually non-stop US equity rally after a rapid escalation of tension between North Korea and the United States this week.

Market analysts expect that the pullback in stocks due to the increasingly aggressive tone in exchanges between Washington and Pyongyang will continue, although investors hope that the selling will not escalate to a correction - a decline of 10 per cent or more.

The benchmark S&P 500 index tumbled more than 1.0 per cent on Thursday, only the third time this year it has fallen that much, while the Nasdaq shed more than 2.0 per cent.

The S&P is trading near its most expensive valuation level since 2004, as measured by the price-to-12-month forward earnings ratio.

US stocks have risen week after week this year - with the S&P up more than 9.0 per cent - in extremely low volatility, as strong corporate earnings and an improving global economy offset disappointment that US President Donald Trump's promises to lower corporate taxes and implement a massive infrastructure spending have so far failed to see the light of day.

More than 430 stocks from all US exchanges hit their lowest levels in 52 weeks or more on Thursday, the most for any session since mid-November right after Trump was elected. The average for new 52-week lows this year is about 230 per day, according to Reuters.
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