US Stocks: Worst day of 2012 (ext)

NEW YORK (CNNMoney) -- Investors took a big step back Tuesday, but stocks have had a pretty strong year so far, so the retreat isn't ringing any alarm bells.

"You're still seeing echoes of the risk-on-risk-off trade," Jonathan Lewis, chief investment officer at Samson Capital Advisors. "But I would offer that all investors are doing is restructuring and rebalancing portfolios."

Stocks were pressured Tuesday by weaker economic data out of Europe and rising yields on euro-area government bonds, said Lewis.
The Dow Jones industrial average (INDU) fell 207 points, or 1.6%, to end at 12,759. That marks the worst day for the index since Dec. 8, when it fell 1.63%. Today also marks the first time the Dow has suffered a triple-digit loss in 45 days.

The S&P 500 (SPX) fell 21 points, or 1.5%, to 1,343. The Nasdaq (COMP) sank 40 points, or 1.4%, to 2,910. Both indexes suffered the worst one-day performance so far this year.

Meanwhile, investors are wary of political tension between Iran and Israel, which has driven oil and gas prices sharply higher, said Mark Martiak, senior wealth strategist at Premier Financial Advisors.

"It's more based on what's going on globally," said Martiak, pointing to unresolved debt issues in Europe and signs of slowing economic growth in China.

Investors are also keeping an eye on Greece, where private-sector bondholders need to officially agree to a crucial restructuring of the nation's debt this week. If bondholders do not sign on in sufficient numbers, Greece's bailout could be in jeopardy and the nation could face a hard default.

"There's a lot of uncertainty in the market," said Martiak.

Analysts say markets are still poised to move higher, given the recent improvement in U.S. economic data, although trading could remain choppy.The dollar strengthened against the euro and the British pound, but dropped versus the Japanese yen.

Oil for April delivery slipped $2.02 to end at $104.70 a barrel.

The national average price for a gallon of gasoline eased Tuesday, dropping three-tenths of a cent to just above $3.76 a gallon, after pushing higher for 27 straight days.

Gold futures for April delivery fell $31.80 to $1,672.10 an ounce.