North Korea concerns trigger U.S. stock slide; oil rises
Congress, Harvey also weigh on Wall Street as Dow falls 234 points
Concerns about saber-rattling over North Korea shook stocks on Tuesday.
North Korea conducted its most powerful nuclear test to date Sunday. Investors were weighing the implications of the Trump administration’s pressuring of China and other members of the United Nations Security Council to further cut off their economic dealings with the country. Trump insists that all options are on the table in dealing with North Korea.
“North Korea (is) the largest threat from that area of the world in many years,” said Bruce Bittles, chief investment strategist at financial services firm Robert W. Baird & Co.
The Standard & Poor’s 500 index shed 18.70 points, or 0.8%, to end at 2,457.85. The Dow Jones industrial average fell 234.25 points, or 1.1%, to finish at 21,753.31. The Nasdaq composite dipped 59.76 points, or 0.9%, to close at 6,375.57.
September and October historically are tough months for investors. And a myriad of complex economic policy issues — such as raising the debt ceiling, passing the federal budget and considering tax reform — await lawmakers as Congress reconvenes.
“With Congress facing the debt ceiling and budget negotiations, there are concerns that there might be the usual political posturing before a deal is struck,” said Quincy Krosby, chief market strategist at Prudential Financial.
Hurricane Harvey and its aftermath are on investors’ minds as companies, victims and insurance adjusters begin to assess its financial impact, Krosby said.
“Given how many important items have to be dealt with ... investors question the ability of the administration and Congress to craft tax reform/tax cut legislation in 2017,” she said.
Energy was one of the few areas that saw gains Tuesday as crude oil prices continued to rise, partly due to a boost in demand after Harvey. The S&P 500 energy sector rose 0.6%. Benchmark U.S. crude gained $1.26, or 2.7%, to $48.55 a barrel on the New York Mercantile Exchange.