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.
On the corporate front, shares of Chesapeake Energy Corp. (NYSE:CHK) surged 5.19 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.
Wal-Mart Stores, Inc. (NYSE:WMT) shares declined 3.09 percent after sales at stores open at least a year fell 1.8 percent for the quarter ended Jan. 28.
European stock markets ended lower for the third day on Tuesday amid continuing political unrest in the Middle East and North Africa.
The Stoxx 600 advanced 0.6 percent to 285.38. DAX30 declined 3.46 points or 0.05 percent to 7,318.35, CAC 40 fell 47.14 points or 1.15 percent 4,050.27 and the FTSE 100 declined 18.04 points or 0.30 percent to 5,996.76.
Airline stocks were among the worst performers as oil climbed to the highest price in more than two years. Air France-KLM Group plunged 3 percent 1179 euros and easyJet PLC fell 2.28 percent.
Informa declined 2.9 percent after the company said its full year net income fell to 98.9 million pounds ($160 million) from 105.6 million pounds last year.
BAE Systems declined 4.3 percent and Rolls-Royce fell 1.52 percent, while EFG Eurobank Ergasias SA declined 4.19 percent.
Asian stock markets ended lower on Tuesday as continued political unrest in the Middle East weighed on the sentiment.
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.
Japanese benchmark index Nikkei fell 1.78 percent or 192.83 points to 10,664.70. Toyota Motor fell 2.56 per cent to 3,805 yen and Sony Corp. declined 1.30 per cent to 3,035 yen, while Honda Motor declined 2.44 per cent to 3,590 yen.
Hong Kong stocks recorded the biggest decline in three months as developer’s shares on concern the city may try to curb city's sizzling property market. Benchmark Hong Kong’s Hang Seng index plunged 494.61 points or 2.11 percent to 22,990.81.
Hang Lung Properties Ltd. fell 2.44 percent and HSBC Holdings PLC declined 2.59 percent. Shares of Alibaba.com plunged 8.63 percent after the company said its CEO and COO had resigned following following a company probe that found fraudulent vendors.
Chinese stocks ended lower on Tuesday as airlines stocks plunged on soaring oil price triggered by the unrest in Libya. Shanghai composite plunged 2.60 percent or 76.29 points to 2,855.96. China Southern Airlines slumped 5.23 percent and Air China fell 5 percent, while China Eastern Airlines declined 4.93 percent.
South Korean shares fell sharply, led by declines from transportation and developers shares. Benchmark Seoul composite declined 35.38 points or 1.76 percent to 1,969.92. Hyundai Engineering & Construction Co., which gets most of its revenue from the Middle East, plunged 9.73 percent and Korean Air Line slumped 10.13 percent.