Stocks tumbled on heightened geopolitical tensions in Korea and rising fears about the spread of euro zone debt crisis. Minutes from the last FOMC meeting which revealed disagreements among policymakers over the efficacy of the second round of quantitative easing did not help market sentiment either.

The Dow Jones Industrial Average sank 142.21 points, or 1.27 percent, to 11,036.37; the Nada dumped 37.07 points, or 1.46 percent, to 2,494.95; and the S&P 500 index shed 17.11 points, or1.43 percent, to 1,180.73.

North and South Korea exchanged fire, resulting in the death of two South Korean soldiers, sparking threats of a potential retaliation by Seoul.

Safe-haven assets like the U.S. dollar and gold climbed in value as investors got rid of riskier assets.

Concerns are growing about peripheral euro nations Spain and Portugal in the wake of Ireland’s request for a bailout loan from the European Union and International Monetary Fund.

In addition, to compound the gloomy trading session, the FOMC minutes also indicated that Fed officials have downgraded their economic growth forecasts for this year and next, while raising unemployment predictions.

Also, the National Association of Realtors reported that existing home sales fell by 2.2 percent in October,

On the bright side, J. Crew (NYSE: JCG) surged 16.84 percent after agreeing to be acquired by buyout firms TPG Capital and Leonard Green & Partners for $2.8 billion.

European, UK markets plunged on Korean military conflicts.

Britain's FTSE-100 dropped 1.75 percent, Germany’s DAX fell 1.72 percent and France's CAC-40 plummeted 2.47 percent.