The Dow Jones Industrial Average ($INDU) suffered a steep triple-digit loss Tuesday as turmoil in Libya ignited a global sell-off in stocks. Oil prices rose sharply, as did safe-haven assets such as Treasurys and the dollar.

Libyan leader Moammar Gadhafi vowed to fight on to his "last drop of blood" Tuesday after two nights of bloodshed in the nation's capital as his forces tried to crush the uprising that has fragmented his regime, the Associated Press reported.

The increasingly unstable situation in Libya and elsewhere in the Middle East punished equities worldwide. The blue-chip Dow dropped 179 points, or 1.4%, to close at 12,212. The tech-heavy Nasdaq Composite ($COMPX) lost 78 points, or 2.7%, to finish at 2,756. The broader S&P 500 ($INX) fell declined 28 points, or 2.1%, to close at 1,315. At the same time, the CBOE Market Volatility Index ($VIX) , also known as the VIX or the investor fear gauge, jumped 30%.

Treasurys and the Dollar Rise

The increasing tension in Africa's third-largest oil producer and OPEC member sent oil prices soaring. Benchmark crude traded on the New York Mercantile Exchange vaulted $7.37, or 8.5%, to settle at $93.57 a barrel, its highest close since October 2008. Brent crude, a benchmark contract traded on the ICE Futures Exchange, crossed $108 a barrel before settling at $105.

The Brent benchmark could move higher than $110 if the turmoil in the Middle East continues. Oil prices don't immediately transfer to gasoline pump prices, but they surely have an impact as crude moves through refineries into finished products. AAA data showed gasoline prices hit an average of $3.171 last week across the U.S.

The flight to safety lifted the bond market, as the yield on the benchmark 10-year Treasury note fell to 3.46% from a previous close of 3.59%. (Bond yields and prices move in opposite directions.) Gold futures traded on the Comex division of the NYMEX rose $10, or 0.7%, to finish at $1,398 an ounce. And the dollar strengthened against a basket of major currencies, as the U.S. Dollar Index rose 0.2%.

Disappointing news on the corporate front also abetted the sell-off in U.S. equities. Walmart (WMT), the world's largest retailer and a Dow component, posted a 27% rise in fourth-quarter profit, but sales in the U.S. continued a troubling slump.

One Bright Spot

Dow component Bank of America (BAC) saw its shares drop after the nation's biggest bank by assets said its credit card division would restate eight quarters of reports to regulators because of deteriorating credit and new regulations.

In U.S. economic news, consumer confidence surged in February to its highest level in three years as Americans grew increasing confident that the economy -- and their income prospects -- will improve in the months ahead. However, the S&P/Case-Shiller home price index showed that house prices in a majority of major U.S. cities fell to their lowest levels since the housing bubble burst.