U.S. stocks down sharply on Libya unrest; Dow Jones drops 0.59%

Forex Pros – U.S. stock markets posted sharp losses after the open on Tuesday, as market sentiment was weighed by escalating unrest in Libya and after industry data showed that U.S. home prices dropped for the sixth consecutive month.  

During early U.S. trade, the Dow Jones Industrial Average slumped 0.59%, the S&P 500 index tumbled 0.99%, while the Nasdaq Composite index plunged 1.72%. 

In Libya, violent clashes between police and protesters spread to Tripoli as the nation's long ruling leader, Muammar Qaddafi appeared to lose control of some eastern parts of the country to anti-regime forces, The Wall Street Journal reported.

According to Al-Jazeera, military warplanes had fired on anti-government demonstrators overnight, while Al Arabiya television said 160 died in violence in Tripoli.

U.S. listed shares of the largest oil company operating in Libya, Eni SpA tumbled 7.16% amid fears that worsening violence in the country would disrupt oil production. 

Spanish oil major Repsol YPF, which also has operations in Libya saw shares plunge 5.07%, while Royal Dutch Shell, which closed its offices in Tripoli on Monday, saw shares slip 0.78%.

Meanwhile, the world's largest retailer Wal-Mart saw shares sink 3.81% after it posted its seventh consecutive quarterly sales decline at its U.S. stores, falling short of its own projections for the holiday period.

Shares in the largest U.S. lender Bank of America plunged 3.12% after it said it would double the write-down for its credit-card unit, to USD20.3 billion, citing increased losses and the impact of new legislation.

JP Morgan saw shares slide 2.31%, Citigroup lost 2.04%, while shares in Goldman Sachs fell 1.89%.  

However, the largest U.S. home improvement retailer Home Depot saw shares jump 1.21% after the company posted better-than-expected fourth quarter earnings, as more people started on home-improvement projects in the quarter.

Shares in natural gas producer Chesapeake Energy rallied 4.53% after it announced late Monday that it agreed sell its shale assets to BHP Billiton for approximately USD4.75 billion. U.S. listed shares of BHP gained 0.91% in early trade.

Across the Atlantic, European stock markets were broadly lower. The EURO STOXX 50 dropped 0.86%, France's CAC 40 tumbled 1.14%, Germany's DAX declined 0.08%, while Britain's FTSE 100 fell 0.47%.

Earlier in the day, the S&P/Case-Shiller home price index fell broadly in line with expectations, dropping by 2.4% in December, declining for the sixth consecutive month.

Later in the day, the U.S. was to publish data on consumer confidence compiled by the Conference Board as well as a report on manufacturing activity in Richmond.

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