US stocks declined in early trade on Tuesday as political unrest in the Middle East weighed on the sentiment.

The S&P 500 Index declined 15.59 points, or 1.14 percent, to trade at 1,327.65 at 9:40 a.m. EDT. The Dow Jones Industrial Average declined 96.83 points, or 0.78 percent, to trade at 12,249.42. The Nasdaq Composite Index fell 1.61 percent.

Moammar Gaddafi appeared on state television on Tuesday, local time, to kill rumors that he has left the country. The besieged dictator said he wanted to show that he was still in Libya and not in friendly country Venezuela as reported on Monday. While Gaddafi did not make any substantial references to the bloody struggle taking place around his country demanding his exit, his favorite 'dog' abuse was back with a vengeance.

On the corporate front, shares of Chesapeake Energy Corp. (NYSE:CHK) surged 4.63 percent after BHP Billiton (NYSE: BHP) said it agreed to acquire all of Chesapeake's interests in the Fayetteville Shale play in central Arkansas for $4.75 billion, marking its entry into the US shale gas business.

Home Depot Inc. (NYSE:HD) shares gained 0.23 percent as its fourth quarter earnings beat estimates. Fourth quarter earnings rose to $587 million or $0.36 per share, mainly driven by higher comparable store sales, while analysts’ estimated a profit of $0.31 per share.

Wal-Mart Stores, Inc. (NYSE:WMT) shares declined 4.19 percent after sales at stores open at least a year fell 1.8 percent for the quarter ended Jan. 28.

The euro declined 0.04 percent to 1.3672 against the dollar and the yen gained 0.03 percent against the greenback.

Crude oil futures surged 7.68 percent to $92.82/barrel and gold futures rose 1.04 percent.

European stock markets are currently trading lower with FTSE 100 down by 39.44 points, DAX30 down by 10.24 points and CAC 40 down by 50.73 points.

In Asia, Tokyo shares declined after Moody's Investors Service changed the outlook on the Japan's Aa2 sovereign rating to negative from stable on concern the government policies may not be enough to address the nation’s debt burden.