Technology companies led a steep slide in U.S. stocks Tuesday afternoon as investors weighed the escalating tensions in the Korean peninsula a day after North Korea conducted its most powerful nuclear test to date, triggering U.S. warnings of a “massive military response.” Bank stocks were also down sharply. Energy companies bucked the broader slide as the price of crude oil headed higher.
KEEPING SCORE: The Standard & Poor’s 500 index slid 27 points, or 1.1 percent, to 2,448 as of 1:19 p.m. Eastern time. The Dow Jones industrial average slumped 251 points, or 1.1 percent, to 21,735. The Nasdaq composite lost 93 points, or 1.5 percent, to 6,341. The Russell 2000 index of smaller-company stocks gave up 17 points, or 1.2 percent, to 1,396. Stocks were coming off back-to-back weekly gains.
THE QUOTE: “The market’s just sort of tired,” said Bob Doll, chief equity strategist at Nuveen Asset Management. “It’s been up the last couple of weeks and it’s time for a little pause.”
GEOPOLITICAL JITTERS: Investors had their eye on developments in the Korean Peninsula. South Korean warships conducted live-fire exercises at sea following U.S. warnings of a “massive military response” after North Korea’s biggest nuclear test to date. 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.”
TECH SLIDE: Technology companies, which have been the biggest gainers this year, were down more than the rest of the market. Qualcomm fell $2, or 3.8 percent, to $50.05. Nvidia gave up $5.91, or 3.5 percent, to $164.55.
BANKING SLUMP: Banks and other financial companies also declined as bond yields fell sharply, which forces interest rates on loans lower, hurting banks’ profits. XL Group slid $2.58, or 6.4 percent, to $38.04, while Brighthouse Financial lost $2.65, or 4.6 percent, to $54.84.
ROUGH SEAS: 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 was down $6.35, or 5.1 percent, at $117.89, while Carnival declined $3.03, or 4.4 percent, to $66.10. Norwegian Cruise Line shed $3.17, or 5.4 percent, to $55.37.
ENERGIZED: Gains in crude prices helped lift shares in oil producers and other energy industry companies. Helmerich & Payne gained 82 cents, or 1.9 percent, to $43.84. Halliburton rose 73 cents, or 1.9 percent, to $39.63.
STICKING WITH IT: H.B. Fuller Co. climbed 4.9 percent after the adhesives company agreed to buy Royal Adhesives & Sealants for about $1.58 billion. The stock added $2.47 to $53.15.
HABLA INGLES: Rosetta Stone surged 6.7 percent after the company announced a partnership with Univision Communications to launch English-language learning programs for Hispanic audiences. Shares in Rosetta Stone were up 62 cents to $9.83.
BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.07 percent from 2.17 percent late Friday.
ENERGY: Benchmark U.S. crude gained $1.40, or 3 percent, to $48.69 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, rose $1.01, or 1.9 percent, to $53.35 a barrel in London.
CURRENCIES: The dollar declined to 108.75 yen from Monday’s 109.72 yen. The euro rose to $1.1904 from $1.1897.
MARKETS OVERSEAS: In Europe, Germany’s DAX was up 0.2 percent, while the CAC 40 in France was 0.3 percent lower. London’s FTSE 100 was down 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.