September 5, 2017 / 1:00 AM / a year ago

U.S. stock index futures modestly lower on North Korea concerns

NEW YORK (Reuters) - U.S. stock index futures were modestly lower on Monday, paring losses from Sunday after North Korea said it conducted a hydrogen bomb test.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 31, 2017. REUTERS/Brendan McDermid

North Korea on Sunday conducted its sixth and most powerful nuclear test, which it said was of an advanced hydrogen bomb for a long-range missile, marking a dramatic escalation of the regime’s stand-off with the United States and its allies.

On Monday, the United States accused North Korea’s trading partners of aiding its nuclear ambitions and said Pyongyang was “begging for war” after the North’s powerful nuclear test on Sunday and signs that further missile launches were on the way.

S&P 500 e-minis EScv1 were down 6.25 points, or 0.25 percent, with 225,794 contracts changing hands. Nasdaq 100 e-minis NQcv1 were down 12.5 points, or 0.21 percent, in volume of 52,901 contracts. Dow e-minis 1YMcv1 were down 51 points, or 0.23 percent, with 29,103 contracts changing hands.

Equity markets recently have been able to withstand geopolitical events surrounding North Korea, with initial losses erased relatively quickly. S&P e-mini futures opened 0.5 percent lower on Sunday. The benchmark S&P 500 index closed within 5 points of a record high on Friday.

The CBOE Volatility Index .VIX, a measure of investor anxiety, closed on Friday at 10.13, a three-week low.

“Certainly equities have really not priced in this North Korean threat to global stability; much like the volatility index and gold, equities have remained placid,” said Peter Kenny, senior market strategist at Global Markets Advisory Group in New York.

“Complacency, which has been a fixture in the market for an extended period of time, when it does come to an end, it comes to an end very abruptly.”

In merger news, Aerospace supplier United Technologies Corp (UTX.N) has struck a $30 billion agreement to buy avionics and interiors maker Rockwell Collins Inc (COL.N), the companies said on Monday.

Benchmark U.S. gasoline futures RBc1 fell 3.6 percent to their lowest since Aug. 25 as shipping channels, oil pipelines and refineries restarted some operations and authorities lifted an evacuation order for the area around a once-burning chemical plant in the wake of Hurricane Harvey.

Reporting by Chuck Mikolajczak; Editing by James Dalgleish

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