U.S. Stocks Plunge amid Mideast Tensions

The U.S. stocks plunged on Tuesday, with the Dow Jones industrial average tumbling nearly 200 points, as the Mideast unrest gave traders reasons to retreat after three straight weeks of gains.

The blue-chip average sank 178.46, or 1.44 percent, to end at 12,212.79, the biggest percentage drop since November.

The Broader indexes suffered more severe sell-off, with the Standard & Poor's 500 Index plummeting 27.57 points, or 2.05 percent, to 1,315.44 and the Nasdaq declining 77.53 points, or 2. 74 percent, to 2,756.42.

Meanwhile, the Chicago Board Options Exchange Volatility Index, which is regarded as the "fear index" for its tendency to rise when stocks fall, soared as much as 29 percent on Tuesday, the biggest advance since June.

Tuesday's sharp decline came after a three-day Presidents Day weekend that saw the U.S. stock market closed on Monday. The market was heavily pounded as investors came back with mounting concerns that the unrest in Libya would spread to other oil-rich countries, pushing gas prices higher for consumers.

As tension mounts in Libya, crude for April delivery soared more than 6 percent to settle at 95.42 dollars a barrel, the highest in more than two years.

Investors dumped stocks and turned to less riskier assets like U.S. Treasurys to seek safety. After the recent rally, which had pushed stocks to fresh multi-year highs, many investors believed that Wall Street had been ready for a correction.

Also weighing on the market, both economic data and corporate earnings came in mixed, doing little to help the equities.

The Standard & Poor's/Case-Shiller Home Price Index of 20 large metropolitan areas fell 1 percent in December, with the home prices in eleven cities hitting new lows. Meanwhile, the decline marked the sixth straight month of losses and the eighth time in the past 11 months.

The Consumer Confidence Index rose in February to its highest level in three years as Americans are feeling more optimistic about the economic recovery, according to the Conference Board. It was the index's fifth consecutive monthly increase.

Wal-Mart was one of the worst performers among the 30 Dow components, sliding 1.71 dollars, or 3.1 percent, to 53.67 dollars per share, after the retailer posted its seventh consecutive quarter of lower U.S. same-store sales, and fourth-quarter revenue fell short of analysts' expectations.