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Wall Street skidded deep into negative territory on Tuesday as traders darted into shelters like Treasury bonds and gold. Renewed fears about Europe, ongoing economic concerns and the triggering of key technical levels played a role in darkening sentiment.

Today's Markets

As of 3:45 p.m. ET, the Dow Jones Industrial Average dipped 207 points, or 1.6%, to 12724, the S&P 500 fell 22.9 points, or 1.7%, to 1359 and the Nasdaq Composite skidded 55.3 points, or 1.8%, to 2991.

The biggest drags on the Dow on a point basis were industrials Caterpillar (CAT) and United Technologies (UTX) and energy components Chevron (CVX) and ExxonMobil (XOM). 

In a sign of the uneasiness, the VIX, sometimes referred to as Wall Street's fear gauge, surged 10.3%. The number of trades in declining shares on the New York Stock Exchange outpaced those in advancing shares by a ratio of nine-to-one, according to data compiled by FOX Business.The S&P 500 broke its 50-day-moving average for the first time since December. Market participants generally pay close attention to technical levels on the S&P. 

Exchanges across Europe were under intense selling pressure as well. Germany's DAX shed 2.5%, England's FTSE 100 dropped 2.2% and Italy's MIB plunged 5%. Traders have once again started to focus on debt yields in eurozone countries that have have public debt levels, paying particularly close attention to Spain and Italy. 

The yield on Italy's 10-year note jumped 0.12-percentage point on the day, while the yield on similar notes in Spain climbed 0.18-percentage point. The fear is that as the yields rise, borrowing costs inherently go up, meaning it becomes more challenging for the countries to cut down their debt loads. Unlike smaller countries like Greece, bailing out bigger players would be considerably more costly, and a debt default could be painful to the euro currency bloc and financial markets across the globe.  

At the same time, traders continued moving into the safety of Treasury bonds. 

The yield on the 10-year has plummeted 0.249-percentage point in the biggest four-day decline since November 2011. The fell by another 0.047-percentage point to 2.005% on Tuesday. As bond prices rise, yields fall. 

Renewed worries that the American economic recovery may be losing steam, coupled with fading hopes that the Federal Reserve is ready to provide another round of stimulus, has knocked the S&P 500 down 2.6% over the past four trading days. It has been the steepest losing streak for the broad-market index since December 2011. Still, the index remains up nearly 10% for the year. 

Earnings season kicks off after the closing bell on Tuesday. Aluminum giant Alcoa (AA) is expected to post a four cent per share quarterly loss on revenue of $5.8 billion. 

In energy markets, U.S. crude has retreated more than 6% from its 2012 high of $109.77 a barrel as tension has calmed somewhat between Western states and Iran and supplies have swelled. The benchmark contract traded in New York stumbled $1.29, or 1.3%, to $101.15 a barrel. New York Harbor wholesale gasoline dipped 4 cents, or 1.1%, to $3.26 a gallon. 

In metals, gold ticked lower by $3.90, or 0.24%, to $1,640 a troy ounce. 

Corporate News

Best Buy (BBY) said its Chief Executive Officer Brian Dunn has resigned.

Foreign Markets 

European blue chips sold off by 3%, the English FTSE 100 slumped 2.2% to 5596 and the German DAX dropped 2.5% to 6606. 

In Asia, the Japanese Nikkei 225 slipped 0.09% to 9538 and the Chinese Hang Seng shed 1.2% to 20356. 

Follow Adam Samson on Twitter @adamsamson.