Early sell-off rocks Wall Street as oil climbs

Dow drops 400 after trimming an early plunge of 1200 amid global anxiety on Iran.

- By Stan CHOE

A selloff for stocks wrapped around the world and hit Wall Street on Tuesday, while oil prices climbed even higher on worries about the widening war with Tran. But the big moves that rocked markets in the morning eased substantially as the day progressed.

By the end of trading, the Standard & Poor’s 500 had sunk 0.9%. That would be a solid loss on a typical day, but the index had been down as much as 2.5% in the morning because of worries that the war may do more sustained damage to the economy than initially feared.

The Dow Jones industrial average dropped 403 points, or 0.8%, after plunging more than 1,200 points earlier in the morning. The Nasdaq composite pared its loss to 1%.

It was just a day earlier that U.S. stocks opened the morning with a sharp loss, only to recover all of it and end the day with a tiny gain. Helping to drive that rebound was a record showing that past wars and conflicts in the Middle East usually have not meant long-term pain for U.S. stocks.

But that was with the caveat that oil prices did not jump too high, like above ‘$100 per barrel. On Tuesday, oil prices rose again and raised more alarms. The price for a barrel of Brent crude, the international standard, briefly leaped above $84.

The jump lessened throughout the day, though, which helped moderate the losses for stocks. Brent settled at $81.40, up 4.7%. A barrel of benchmark U.S. crude rose 4.7% to $74.56.