Surging oil prices along with disappointing earnings sent the markets tumbling to close sharply lower with the Dow dropping 105 points to 12,720. Nasdaq plunged 31 points to 2377.

On the upside

DryShips (Nasdaq: DRYS) will make a tender offer to acquire the minority stake in offshore drilling services firm Ocean Rig that it does not already own.

Pride International (NYSE: PDE) lowered the threshold from 15% to 10% ownership that will trigger its shareholder rights plan after shareholder Seadrill increased its stake to 9.9%.

Medco Health Solutions (NYSE: MHS) signed a contract to provide pharmacy benefits services to UnitedHealth (NYSE: UNH) for four years.

On the downside

Spectrum Pharmaceuticals' (Nasdaq: SPPI) mid-stage clinical trial of its enlarged prostate treatment ozarelix failed to demonstrate statistically significant patient improvement.

CIT Group (NYSE: CIT) raised $1.5 billion by selling common and convertible preferred stock.

Delta Air Lines (NYSE: DAL) chief executive Richard Anderson said that domestic fares must increase by 15 to 20% in order to break even due to surging fuel prices.

In the broad market, declining issues outpaced advancers by a margin of more than 7 to 3 on the NYSE and by 3 to 1 on Nasdaq. The Russell 2000 which tracks small cap stocks plummeted 14 points to 704.