US stocks slip amid Korea, Ireland concerns

"Geopolitics have thrown the market for a loop this morning, courtesy of a provocative action by North Korea," said Patrick O'Hare of Briefing.com.

The blue-chip Dow Jones Industrial Average slipped 43.37 points (0.39 per cent) to 11,35.21 in opening trades. The S&P 500 index, a broader measure of the market, lost 8.81 points (0.83 per cent) to 1,187.87.

The tech-rich Nasdaq was down 28.01 points (1.11 per cent) to 2,503.66 even after the world's biggest computer maker Hewlett-Packard delivered better than expected earnings.

In one of the most serious border incidents since the 1950s, the North fired dozens of shells onto or around the frontline Yeonpyeong island near the disputed Yellow Sea border, killing two marines and setting homes ablaze.

"Wall Street reels from reports of an exchange of fire between North and South Korea," said Joseph Hargett of Schaeffer's Investment Research.

"The escalation between the Koreas is grating on US investors already bedraggled by Ireland's ongoing debt concerns," he said.

Concerns over the eurozone economy continued to weigh on trade, as Ireland faced more political turmoil after Prime Minister Brian Cowen called for early elections after agreeing on an international bailout plan.

Traders fear that after Ireland, other small European economies will require international assistance to avoid bankruptcy.

The mood was slightly improved by data showing a the US economy grew by 2.5 per cent in the third quarter, at a much faster rate than first thought.

The Commerce Department had previously reported that gross domestic product rose 2.0 per cent in the quarter.

"The double-dip recession concerns have faded, yet growth concerns remain," said O'Hare of Briefing.com.

The release of the minutes from the last meeting of the Federal Reserve's policy-making body later on Tuesday were likely to highlight growth concerns.

In corporate news, Hewlett-Packard reported late on Monday a five per cent rise in quarterly net profit to $2.5 billion while revenue was up eight per cent to $33.3 billion, beating most analysts' expectations.

And packaged-food company Campbell reported a profit of $279 million though its earnings dropped 8.2 per cent in the last quarter citing a decline in soup sales.