U.S. stocks fell sharply on Thursday, with the Dow slipping more than 100 points, as lackluster results from retailers Macy’s and Kohl’s added to investor nervousness over escalating tensions between the United States and North Korea.

North Korea said it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific island territory of Guam in an unusually detailed threat.

The threat followed U.S. President Donald Trump’s warning on Tuesday that any threats by Pyongyang would be “met with fire and fury like the world has never seen.”

Investors again sought safe-haven assets such as gold and the Swiss franc, helping gold hit a more two-month high.

“When you have a market like we have had this year, and it has been amazingly calm, and you introduce a major source of uncertainty, there is bound to be some reaction,” said Brad McMillan, chief investment officer for Commonwealth Financial.

The S&P 500 has hadn’t a single day move of more than 0.5 percent since mid-July and has fallen more than 1 percent only twice this year.

“Absent actual military action, I think the markets will realize that the rhetoric got head of the actual policy and it is time to calm down a little bit,” McMillan said.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, rose to a near three-month high of 15.36.

Retailers’ results are being keenly watched by investors to gauge the companies’ strategy to counter No. 1 online retailer Amazon.com’s growth.

Shares of Macy’s tumbled 8.3 percent and Kohl’s 7.3 percent after the department store operators reported a drop in quarterly same-store sales that stoked concerns that their turnaround may still be a long way off. Dillard’s slumped 13 percent.

At 11:03 a.m. ET (1503 GMT), the Dow Jones Industrial Average was down 110.36 points, or 0.5 percent, at 21,938.34, the S&P 500 was down 19.12 points, or 0.77 percent, at 2,454.90.

The Nasdaq Composite was down 68.30 points, or 1.08 percent, at 6,284.03. The decline was broad, with all the 11 major S&P indexes lower. Financials fell the most, down about 1 percent.

Data showed U.S. producer prices unexpectedly fell in July, recording their biggest drop in nearly a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week.

However, Federal Reserve Bank of New York President William Dudley suggested on Thursday that the central bank was on track to raise interest rates once more as he expects sluggish inflation to rise over the next several months.

Blue Apron slumped as much as 19.1 percent to a record low after the meal-kit delivery service provider reported a bigger-than-expected loss in its first quarterly report as a public company.

Perrigo surged 17.6 percent after the drugmaker raised its full-year adjusted profit forecast.

Canada’s main stock index also fell on Thursday despite a slew of better-than-expected quarterly results, as investors sought refuge in safe-haven assets amid rising tensions between the United States and North Korea.

The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.0 percent to C$93.36, and Manulife Financial Corp falling 2.8 percent to C$24.93. Shares of Manulife, which reported better-than-expected results, fell after the company played down talk of a John Hancock spin-off. The overall financials group, which accounts for roughly a third of the index slipped 0.9 percent.

Materials, home to gold producers and other resource-based companies, was the only gainer among the index’s 10 main sectors.

 

A number of companies reported forecast-beating numbers. TMX Group Ltd was up 3.5 percent to C$68.23, while Quebecor Inc added 2.9 percent to C$44.60.

Canadian Tire Corp Ltd rose 3.4 percent to C$146.65. Canada Goose Holdings Inc fell 3.6 percent to C$23.16, but the luxury down-coat maker initially jumped more than 7 percent after reporting smaller-than-expected quarterly loss.

Declining issues outnumbered advancing ones on the TSX by 164 to 80, for a 2.05-to-1 ratio on the downside.

 

© Thomson Reuters 2017