The Dow Jones industrial average .DJI dropped 169.38 points, or 1.39 percent, to end Tuesday at 12,056.96. If not for Wal-Mart (NYSE:WMT) and Coca-Cola (NYSE:KO) closing in postive territory, the damage would have been much worse.
Concerns that rising oil prices could hurt economic recovery prompted investors on Tuesday to sell stocks and hedge against further declines.
The CBOE Volatility Index VIX .VIX, Wall Street's so-called fear gauge, jumped 13.1 percent to 20.75 on growing uncertainty about oil. The index measures the cost of using options as insurance against a decline in the S&P 500 .SPX index.
"We've been seeing how quickly the VIX can spike up, and there is no reason to believe that it won't double from where it is now," said Harry Rady, CEO of Rady Asset Management in San Diego, California.
Brent crude rose above $115 a barrel as supply disruptions persist and political violence spreads in the Middle East and North Africa. Higher oil translates into increased energy and gasoline costs for consumers.
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