It is little wonder that global stocks were weak on Tuesday morning. If the debt crisis in Ireland and concerns about monetary policy tightening in China weren't enough to worry investors, now they must wrestle with a potential financial crisis in Portugal along with a flare-up of tensions on the Korean peninsula.
U.S. stock index futures were down with about 90 minutes before markets open, suggesting that stocks will fall at the start of trading. Futures for the Dow Jones industrial average were down 105 points or 0.9 per cent. Futures for the broader S&P 500 were down 13 points or 1 per cent.
In Europe, the U.K.'s FTSE 100 was down 0.8 per cent and Germany's DAX index was down 0.4 per cent in afternoon trading. In Asia, Japan's Nikkei 225 rose 0.9 per cent in overnight trading.
On Tuesday morning, North Korea fired rockets at a South Korean island in a one-hour attack that killed two South Korean soldiers and threatened to draw the two countries into a military conflict. The attack initially sent the price of gold higher, but gold later retreated as investors moved into the relative safety of the U.S. dollar. Crude oil futures also fell.
Meanwhile, Canadian inflation rose to a two-year high of 2.4 per cent in October, on a year-over-year basis -- above the 2.2 per cent gain that economists had been expecting. The rise in inflation comes as the Bank of Canada is expected to hold its key interest rate unchanged in the face of slowing economic growth and a stubbornly high Canadian dollar.