Stocks tumbled in a holiday-shortened session on worries over threats of war by North Korea and pervasive fears that the euro zone sovereign debt crisis may spread to Spain and Portugal. Apparently, traders saw little solace in what appears to be shaping up as a strong Black Friday on the retail front.

The Dow Jones Industrial Average dropped 95.28 points, or 0.85 percent, to 11,092.00 The S&P 500 index slipped 8.95 points, or 0.75 percent, to 1,189.40. The Nasdaq composite index fell 8.56 points, or 0.34 percent, to 2,534.56.

Portugal’s government passed a series of austerity measures, including tax hikes and spending cuts, which it claims would be sufficient to avoid having to receive a bailout from the European Union.

On the others side of the world, North Korea warned that if South Korea and the U.S. hold military maneuvers in the region, the Asian peninsula may find itself on the edge of war.

The dollar surged against the euro as S&P downgraded the debt of Ireland's banks.

Oil futures rose marginally, while gold slipped slightly.

 European bourses also fell.