Escalating tensions on the Korean peninsula rattled nerves on Wall Street Tuesday, leading to the stock market’s worst day in almost three weeks. ADVERTISING Escalating tensions on the Korean peninsula rattled nerves on Wall Street Tuesday, leading to the stock
Escalating tensions on the Korean peninsula rattled nerves on Wall Street Tuesday, leading to the stock market’s worst day in almost three weeks.
Escalating tensions on the Korean peninsula rattled nerves on Wall Street Tuesday, leading to the stock market’s worst day in almost three weeks.
Bank stocks led the slide as bond yields slumped. Technology stocks, the biggest gainers this year, also pulled the market lower. Energy companies climbed the most as the price of crude oil rose.
Traders also bid up shares in traditional safe-haven investments such as utilities and gold, which climbed to the highest level in more than a year.
“Today the risk-off trade really is North Korea front and center,” said Jeff Zipper, managing director of investments at U.S. Bank Private Wealth Management. “Also you have the hurricane last week and the upcoming hurricane, so there’s a lot on the plate for the market to digest.”
The Standard & Poor’s 500 index slid 18.70 points, or 0.8 percent, to 2,457.85. The Dow Jones industrial average slumped 234.25 points, or 1.1 percent, to 21,753.31. The average had been down more than 277 points. The Nasdaq composite lost 59.76 points, or 0.9 percent, to 6,375.57. The Russell 2000 index of smaller-company stocks gave up 13.92 points, or 1 percent, to 1,399.66.
Stocks were coming off back-to-back weekly gains as investors returned from the Labor Day holiday weekend to heightened tensions between the U.S. and North Korea, which conducted its most powerful nuclear test to date on Sunday, triggering U.S. warnings of a “massive military response.”
On Tuesday, South Korean warships conducted live-fire exercises at sea. The U.N. Security Council held an emergency meeting and American Ambassador Nikki Haley said North Korean leader Kim Jong Un is “begging for war.”
The latest developments fueled anxiety in the markets. The VIX, a measure of how much volatility investors expect in stocks, jumped 20.7 percent to 12.23.
Gold rose $14.10, or 1.1 percent, to $1,344.50 an ounce. That’s the highest price since gold hit $1,348.40 an ounce on Sept. 27.
Bond prices also rose. The yield on the 10-year Treasury note fell to 2.06 percent from 2.17 percent late Friday.
The slide in bond yields weighed on shares in banks and other financial companies. Lower bond yields push interest rates on loans lower, hurting banks’ profits. XL Group slid $2.35, or 5.8 percent, to $38.27, while Brighthouse Financial lost $3.41, or 5.9 percent, to $54.08. All told, the financial sector fell 2.2 percent Tuesday, the biggest decliner in the S&P 500.
Technology companies also fell sharply. Qualcomm lost $2.02, or 3.9 percent, to $50.03. Nvidia gave up $4.55, or 2.7 percent, to $165.91.
Gains in crude prices helped lift shares in oil producers and other energy industry companies. Helmerich & Payne rose 75 cents, or 1.7 percent, to $43.77. Halliburton added 93 cents, or 2.4 percent, to $39.83.
Benchmark U.S. crude gained $1.37, or 2.9 percent, to settle at $48.66 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, rose $1.04, or 2 percent, to close at $53.38 a barrel in London.
Shares in cruise line operators fell as Hurricane Irma roared toward islands in the northeast Caribbean Tuesday. The Category 5 storm, the most powerful seen in the Atlantic in over a decade, was on a path that could eventually take it to the United States.
Royal Caribbean Cruises slid $5.20, or 4.2 percent, at $119.04, while Carnival declined $2.16, or 3.1 percent, to $66.97. Norwegian Cruise Line shed $1.85, or 3.2 percent, to $56.69.
The dollar declined to 108.66 yen from Monday’s 110.24 yen. The euro rose to $1.1918 from $1.1869.
In other energy trading, wholesale gasoline dipped 5 cents to $1.70 a gallon. Heating oil was little changed at $1.75 a gallon. Natural gas slid 10 cents, or 3.2 percent, to $2.97 per 1,000 cubic feet.
Among metals, silver rose 13 cents to $17.94 an ounce, while copper gained 1 cent to $3.13 a pound.
Stock markets overseas were mixed Tuesday.
In Europe, Germany’s DAX rose 0.2 percent, while the CAC 40 in France declined 0.3 percent. London’s FTSE 100 lost 0.5 percent after a survey of business activity showed a slowdown.
Earlier in Asia, Tokyo’s Nikkei 225 fell 0.6 percent and Seoul’s Kospi slid 0.1 percent. Hong Kong’s Hang Seng added 1.1 percent.
I thought bank was all together connected to the stock and they are severely responsible for them but somehow rest of the company has main reason behind of that…