Markets got spooked on Tuesday as certain names dropped off a cliff in the face of poor earnings or exposure to Europe.

Late last week and Monday, nearly everyone was convinced that Europe would work itself out and that concerns that Germany and France offered over the European Financial Stability Fund would be rectified. Such is not the case anymore.

New fears over the ability of Italy to survive combined with both poor U.S. and European corporate earnings sent the market into a tailspin on Tuesday with the Dow Jones Industrial Average closing down 205 points at 11,707. The S&P 500 fell 2 percent to 1229, accordingly.

Such large, violent swings in the market have become typical these days and the VIX reflects that, rising above the key 30 point mark yet again to 31.69.

Three of the biggest problem stocks on Tuesday included Netflix and First Solar Inc. Netflix took a hit of 35 percent despite beating expectations on earnings as subscribers fled the service. Kynikos Associates’ Jim Chanos proved to have a shrewd short in First Solar, which ended the day down more than 20 percent. Chanos had originally said he was short First Solar earlier this year at the Ira Sohn investment conference.

Meanwhile, a certain New York-based broker-dealer lost nearly half its value amid growing concerns over its net long position in short-term European sovereign debt, which amounts to $6.3 billion. Moody’s cut its debt to Baa3, one notch above junk rating, on Monday.

The outcome of the rest of the week lies with earnings reports and the state of the European Union.