U.S. stocks plunged and oil prices surged on growing fears that Libya may descend into a civil war after Colonel Moammar Gaddafi warned that he would never give up his power and would rather die a “martyr.” The concerns about Libya vastly overshadowed some surprisingly good consumer confidence data in the U.S.
The Dow Jones Industrial Average dropped 178.46 points, or 1.44 percent, at 12,212.79. The S&P 500 index tumbled 27.57 points, or 2.05 percent, to 1,315.44. The NASDAQ composite index lost 77.53 points, or 2.74 percent, to 2,756.42.
Oil futures in New York soared more than 9 percent to $94 per barrel after the deepening crisis in Libya prompted fears that oil supplies might be hampered. Libya is the world's eighteenth largest oil producer, and produces 2 percent of global daily output.
Hundreds of people in Libya have been killed during the turmoil, as Gaddafi appears to be losing his grip on power and reality. More and more of his government’s officials have either resigned or defected to join the protest movement. Some foreign oil companies have either shut down their operations or scaled them back.
While consumer confidence spiked in February to a three-year high; home prices slipped for the sixth consecutive month in December.
Airline stocks led today’s losers, on fears of higher fuel costs.
Delta Air Lines Inc. (NYSE: DAL), AMR Corp. (NYSE: AMR), and United Continental Holdings Inc. (NYSE: UAL) plummeted by 6.61 percent, 5.65 percent and 9.21 percent, respectively.
Barnes & Noble Inc. (NYSE BKS) plunged 14.35 percent after the company said its net income fell 25 percent. The book seller also suspended its dividend.
Bonds rose as the yield on the 10-year Treasury note slipped to 3.46 percent.