Tuesday saw a decline in the shares as volatile stocks were unloaded by investors due to increasing tension between the two Koreas and mounting concerns on debt problem in Europe.
The prices of stock at the iShares MSCI South Korea Index Fund(ETF) NYSE:EWY dropped by 5.43 percent following the most serious attacks by the North since the end of the Korean War in 1953.
The situation has prompted traders to realize that geopolitics can easily affect the outcome in the market said Jeff Kleintop of LPL Financial. Aside from the situation in Asia, the deepening debt problem in Ireland also caused the stocks in Europe to decline which has left investors apprehensive about the deteriorating situation in the continent.
Despite the situation, the Prime Minister of Ireland, Brian Cowen, rejected snap election requests and indicated that the budget will not be modified. This has resulted to a reduction of nearly five percent in the shares of stocks identified with Irish businesses.
The US stock futures have also gone down as global markets were rattled by the events that happened at the Korean peninsula. Tuesday saw Dow Jones (INDEXDJX:.DJI) futures go down to 70 points under fair value. As Asian markets closed at a loss, the European market was gradually going down in the middle of the day.
This was the effect of both the Korean Peninsula situation and the increased concerns about moves by the central bank of China. The market in Japan was closed due to a holiday. The US GDP was projected to increase by 2.4 percent for the third quarter.
The Dow Jones went down to 11,036.37 or a loss of 142.21 points. S&P 500 (INDEXSP:.INX) dropped to 1,180.73 as it lost 17.11 points. The Nasdaq (INDEXNASDAQ:.IXIC) closed at 2,494.95 or a drop by 37.07 points.
