1st LD Writethru: U.S. stocks tumble following European markets

U.S. stocks suffered big losses Tuesday as the rout in European equity markets rattled nervous investors.

The Dow Jones Industrial Average slid 179.72 points, or 1.09 percent, to 16,330.47. The S&P 500 lost 24.23 points, or 1.23 percent, to 1,942.74. The Nasdaq Composite Index shed 72.23 points, or 1.50 percent, to 4,756.72.

European shares ended drastically lower Tuesday, with Germany's benchmark DAX index at the Frankfurt Stock Exchange diving 3.8 percent, as a result of Volkswagen's emissions scandal.

The German carmaker on Tuesday revealed that a total of 11 million diesel cars may have been involved in the emissions-testing manipulations.

The company's shares plummeted 19.8 percent Tuesday, following previous day's deep decline of 18.6 percent, on news that it could face an 18-billion U.S. dollars fine in the U.S. for rigging emission tests on its diesel vehicles.

In Asia, Chinese equities extended their rally on Tuesday, with the benchmark Shanghai Composite Index gaining 0.92 percent, while Japan's stock markets were closed for the National Day holiday.

Some analysts believed that uncertainty about the timing of interest rate hikes by the U.S. Federal Reserve had led to increased volatility.

The U.S. central bank held its benchmark rate near zero after concluding its two-day monetary policy meeting Thursday. Most Fed officials, however, still expect a rate increase this year, the first in nine years.

On the economic front, U.S. house prices increased 0.6 percent in July from the previous month, the Federal Housing Finance Agency reported Tuesday. From July 2014 to July 2015, house prices were up 5.8 percent. Endit