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(Updates prices, changes comment)
* Snap British election boosts sterling
* Gold up, crude oil slips
* Focus on French elections this weekend, Korean peninsula
By Rodrigo Campos
NEW YORK, April 18 (Reuters) - Sterling jumped, along with gold, while stocks and the U.S. dollar fell on Tuesday after Britain called a snap election for June, adding to investor concerns over geopolitical instability.
The British pound rallied as much as 2.7 percent against the U.S. dollar to hit its highest level since early October after British Prime Minister Theresa May surprised markets by calling for an early parliamentary election.
Investors also remain concerned about the French presidential election this weekend and the possibility of U.S. military action against North Korea.
In France, opinion polls have for months shown far-right leader Marine Le Pen and centrist Emmanuel Macron qualifying next Sunday for the May 7 run-off. But it remains a contested, four-way vote, with conservative Francois Fillon and far-left candidate Jean-Luc Melenchon.
On Wall Street, disappointing quarterly results from corporate heavyweights Goldman Sachs and Johnson & Johnson dragged major stock indexes lower.
"Those tend to be companies who manage earnings a little better, the fact they have missed perhaps isn’t a very good indication," said Tim Ghriskey, chief investment officer of Solaris Asset Management in New York.
Investors are also concerned that the recent flaring of geopolitical tensions has shifted focus away from expected business-friendly reforms in the United States, seen as the fuel for the U.S. equity rally that peaked in early March.
"There is some nervousness out there about the economy, geopolitical issues and general unpredictability as well," said Ghriskey.
The Dow Jones Industrial Average fell 122.98 points, or 0.6 percent, to 20,513.94, the S&P 500 lost 7.7 points, or 0.33 percent, to 2,341.31 and the Nasdaq Composite dropped 13.04 points, or 0.22 percent, to 5,843.75.
The pan-European FTSEurofirst 300 index lost 1.21 percent and MSCI's gauge of stocks across the globe shed 0.41 percent.
Emerging market stocks lost 0.65 percent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.83 percent lower, while Japan's Nikkei rose 0.35 percent.
The pound rallied as British Prime Minister Theresa May called for an early election on June 8, saying she needed to strengthen her hand in divorce talks with the European Union.
Deutsche Bank said the surprise election call is a "game-changer" for the currency and that it will raise its forecasts for the pound in the coming days.
The U.S. dollar was also pressured by lower Treasury yields.
"We still think the dollar is going to strengthen over time based on the outlook for U.S. monetary policy... but for now, with markets not heavily focused on monetary policy, it could explain this consolidation" in the greenback, said Eric Viloria, currency strategist at Wells Fargo.
The dollar index fell 0.79 percent, with the euro up 0.84 percent to $1.0729.
The Japanese yen strengthened 0.46 percent versus the greenback at 108.43 per dollar, while sterling was last trading at $1.2845, up 2.26 percent on the day.
Oil prices were weighed by concerns that U.S. production growth is undermining efforts to cut oversupply after a U.S. government report said shale oil output in May was expected to post the biggest monthly increase in more than two years.
U.S. crude fell 0.21 percent to $52.54 per barrel and Brent was last at $55.01, down 0.63 percent on the day.
U.S. Treasury yields fell as nervousness ahead of France’s first round of presidential elections this weekend and ongoing geopolitical tensions increased demand for safe-haven U.S. debt.
Benchmark 10-year notes last rose 22/32 in price to yield 2.1753 percent, from 2.252 percent late on Monday.
Gold rose and was not far from an intraday five-month high touched on Monday, bolstered by the weaker dollar, North Korea tensions and the French presidential election.
Spot gold added 0.6 percent to $1,291.30 an ounce. U.S. gold futures gained 0.10 percent to $1,293.20 an ounce.
Copper lost 2.11 percent to $5,572.00 a tonne.
Additional reporting by Karen Brettell, Fergal Smith, Jessica Resnick-Ault, Chuck Mikolajczak and Saqib Iqbal Ahmed in New York; Editing by Nick Zieminski and Dan Grebler