* N. Korea attack rattles global markets, sinks commodities * Q3 GDP growth revised up; October existing home sales fall * FOMC minutes due at 2 p.m. EST * Dow off 1.3 pct, S&P off 1.4 pct, Nasdaq off 1.6 pct (Updates to early afternoon)
By Leah Schnurr
NEW YORK, Nov 23 (Reuters) - U.S. stocks tumbled on Tuesday as escalating tensions on the Korean peninsula compounded with euro zone debt woes and prompted investors to dump risky assets.
North Korea fired scores of artillery shells at a South Korean island, killing two soldiers and setting houses ablaze, and South Korea returned fire. The iShares MSCI South Korea Index Fund fell 5.4 percent.
Global stock markets fell, while the U.S. dollar climbed. U.S. oil futures prices were slightly higher after falling more than 1 percent earlier. Energy and materials shares were the biggest losers. Chevron Corp, down 2 percent at $81.81, was among the heaviest drags on the Dow..
Stocks also took their cue from the euro, which slumped to a 7-week low against the dollar. The two assets have moved in tandem in the past with both viewed as proxies for risk.
"We see for the foreseeable future that correlation with the euro and the market," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati.
"That risk trade is where people are putting their money, whether they're putting money to work or taking money out."
The Dow Jones industrial average slid 149.10 points, or 1.33 percent, to 11,029.48. The Standard & Poor's 500 Index dropped 16.33 points, or 1.36 percent, to 1,181.51. The Nasdaq Composite Index lost 39.40 points, or 1.56 percent, to 2,492.62.
The market is awaiting the release of the Federal Open Market Committee's minutes from Nov. 3, when it ended a two-day meeting with its decision to engage in a second round of quantitative easing. The minutes from the Federal Reserve's policy-making panel are due at 1900 GMT.
Light volume, with traders away ahead of the Thanksgiving holiday, could also exacerbate moves as fewer people in the market leaves fewer people willing to take the opposite side of a trade.
The CBOE Volatility Index, known as Wall Street's fear gauge, shot up 12.6 percent to 20.68.
The European Union urged Ireland to adopt an austerity budget on time to unlock promised EU/IMF funding, while Irish Prime Minister Brian Cowen rebuffed calls for a snap election and insisted the budget would go ahead as planned on Dec. 7.
Data showed the economy grew faster than previously estimated in the third quarter, but still not enough to reduce stubbornly high unemployment. Another report showed existing home sales fell more than forecast in October after two months of gains.
Paul Ballew, chief economist at Nationwide in Columbus, Ohio, said that while there were some positives in the GDP report, it didn't change the market's expectations for where the economy is heading and was overshadowed by international events.
On the upside, J Crew Group Inc surged 16.4 percent to $43.83 after the retailer agreed to a $2.86 billion buyout by two private equity firms. (Reporting by Leah Schnurr; Editing by Jan Paschal)