Stocks on Wall Street tumbled, triggered by a drop in oil futures after North Korea fired artillery on a South Korean island, killing two marines. The Dow Jones Industrial Average wasdown 142.21 points, or 1.3%, to 11,036.37 at the close (10am NZ time). C
Stocks on Wall Street tumbled, triggered by a drop in oil futures after North Korea fired artillery on a South Korean island, killing two marines.
The Dow Jones Industrial Average wasdown 142.21 points, or 1.3%, to 11,036.37 at the close (10am NZ time).
Crude-oil futures fell below $US81 a barrel, sending Chevron and other energy stocks down more than 2%. Other Dow stocks to fall were Walt Disney and Marck, both down 2.3%.
The Korean incident outweighed surprisingly strong growth figures on the US economy.
South Korea warned it would retaliate to a further attack. At least 16 South Korean marines and three civilians were injured by the rocket attack.
The two Yeonpyeong islands are the easternmost of five small islands that are within close firing range of North Korea and only just a few kilometres away from the disputed maritime border.
The incident also sent stocks tumbling in Asia, where markets were about to close when the news broke, and in Europe, where concerns about sovereign debt also continued.
On the US front, the economy expanded at a faster pace than previously thought in the third quarter. GDP rose 2.5% in July through September, up from an initial estimate of 2.0% growth in the third quarter.
Hewlett-Packard was one of only two Dow components that bucked the trend. It gained 0.4% after reporting strong fiscal fourth-quarter results and issued a better-than-expected forecast.
The Nasdaq Composite finished 1.5% down at 2494.95 while the S&P 500 index fell 1.4% to 118.73.
Resource, banking stocks fall in Europe
European stock markets slid as most commodity prices fell on the heightened tensions in Korea.
The Stoxx Europe 600 index’s resources sector dropped 1.6%. Banks also suffered, with Standard Chartered falling 2.7%, Barclays 2.1% and Deutsche Bank fell 2.3%. The Stoxx banking sector lost 2.3%.
Overall, the Stoxx Europe 600 index fell 1.3% to 264.24. The UK's FTSE 100 index lost 1.7% to 5581.28, France's CAC-40 index closed 2.5% lower at 3724.42 and Germany's DAX slid 1.7% to 6705.00.
In Dublin, the ISEQ dropped 2.9% and Spain's IBEX 35 slumped 3.1% as euro-zone debt issues continued to drag on markets.
Asian markets fell as news broke of hostilities between North and South Korea. Seoul’s Kospi Composite declined 0.8% to 1928.94, though news of the shelling unfolded after the close of the domestic financial market.
China's Shanghai Composite dropped 1.9% to 2828.28 and Hong Kong's Hang Seng Index shed 2.7% to 22896.14, closing below 23000 for the first time since October.
Australia’s S&P/ASX 200 was 1.2% down at 4589.07 and Singapore's Straits Times Index fell 2% to 3126.30. Markets in Japan were closed for a public holiday.
Commodities: Oil down, gold up
Crude-oil futures declined as tensions in the Korean peninsula and European debt woes debt weighed on markets.
Light, sweet crude for January delivery settled 49USc, or 0.6%, lower at $US81.25 a barrel in New York after earlier falling below $US81. Brent crude on the ICE futures exchange settled $US1.09 lower, or 1.3%, at $US83.25.
Gold futures extended gains as risks rose in other markets. The most actively traded contract, for December delivery, settled up 1.5%, or $US19.80, at $US1377.60 an ounce in New York.
Currencies: Dollar up, euro down
The US dollar moved sharply higher as markets retreated from risky assets. The euro was at $US1.3377, down from $US1.3624 late on Monday. It was also at ¥110.79, down from ¥113.46.
The dollar was at ¥82.82 from ¥83.28 and at 0.9942 Swiss franc from 0.9901 franc.
The pound was at $US1.5800 from $US1.5961.
