Economy

Stocks tumble as banks sell-off, North Korea tensions mount

Stocks tumble as banks sell-off, North Korea tensions mount”

The Dow Jones Industrial Average ended down 1.1% at 21,753.31, the S&P 500 dropped 0.8% to 2,457.85 and the Nasdaq fell 0.9% to 6,375.57 as traders in the U.S. got their first chance to react to news of North Korea's hydrogen bomb test over the weekend, as markets were closed for Labor Day on Monday.

The standoff between North Korea and the USA and its allies escalated over the weekend after Pyongyang said it had successfully tested its largest-ever nuclear bomb (http://www.marketwatch.com/story/north-korea-hails-perfect-success-of-latest-nuclear-test-triggering-magnitude-63-earthquake-2017-09-03).

USA oil prices rose and gasoline fell as the gradual restart of refineries in the Gulf of Mexico, which had been shut by Hurricane Harvey, eased fears of a fuel supply crunch. XL Group Ltd. slid $2.35, or 5.8 percent, to $38.27, while Brighthouse Financial Inc. lost $3.41, or 5.9 percent, to $54.08.

The Dow Jones Industrial Average fell 217.82 points, or 0.99 percent, to 21,769.74, the S&P 500 lost 21.28 points, or 0.86 percent, to 2,455.27 and the Nasdaq Composite dropped 74.39 points, or 1.16 percent, to 6,360.94. Yesterday's 234-point decline wasn't anywhere near that level - nor was it even close to the 470 points needed to make the list of the 20-largest point drops of all-time, regardless of percentage decline.

Brainard's comments helped 10-year U.S. Treasuries reach their lowest since November.

Technology companies also fell sharply.

The yen nearly always gains when investors try to reduce exposure to risk because the currency is often used as a funding source to buy riskier, higher-yielding assets.

Among the stocks with unusual options volume is home improvement icon Home Depot Inc (NYSE:HD), with over 28,000 calls traded - three times the average intraday pace, and on track for the 98th percentile in its annual range. Nvidia Corp. gave up $4.55, or 2.7 percent, to $165.91.

Gold, the traditional go-to for traders when political concerns escalate, also eased on Tuesday, with investors booking profits after the previous session's rise to a one-year high.

Brent crude, the worldwide benchmark, last traded unchanged at $53.38 a barrel.

On oil markets both main contracts eased in Asia after surging Tuesday - WTI jumped around three percent and Brent put on two percent - on reports Russian Federation and Saudi Arabia were considering extending a production cut.

Shares in cruise line operators fell as Hurricane Irma roared toward islands in the northeast Caribbean on Tuesday.

In other energy trading, wholesale gasoline dipped 5 cents to $1.70 a gallon. The USD/JPY exchange rate has declined more than 1% since the start of September.

Stock markets overseas were mixed Tuesday. Hong Kong's Hang Seng added 1.1 percent.

The Australian dollar was up 0.1 percent at $0.7948 after the risk aversion that gripped the broader markets overnight pulled it off a one-month high of $0.7997 set on Friday.



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