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Wall Street lower as Germany downplays debt summit

Wall Street lower as Germany downplays debt summit
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First Published: Tue, Oct 18 2011. 04 18 PM IST

Updated: Tue, Oct 18 2011. 04 18 PM IST
New York: Wall Street stocks fell on Monday after the market’s best two-week run since 2009 as Germany’s finance minister said a forthcoming summit would not yield a definitive solution to Europe’s debt crisis.
German finance minister Wolfgang Schaeuble’s statement that European governments will not resolve the crisis at a European Union meeting scheduled for 23 October poured cold water on stocks that had run up partly in anticipation of an end-game to the crisis.
Schaeuble’s comments weighed on the euro currency and pressured the S&P’s financial index. The financial sector was one of the biggest drags on the market, falling more than 1%.
An earnings miss from Wells Fargo & Co, down nearly 6%, also hit the sector.
“All eyes are on Europe,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. “We are, no doubt, one-for-one trading with the euro.”
The Dow Jones industrial average fell 70.16 points, or 0.60%, at 11,574.33. The Standard & Poor’s 500 Index lost 8.38 points, or 0.68%, at 1,216.20. The Nasdaq Composite Index dropped 15.74 points, or 0.59%, at 2,652.11.
The S&P 500 had risen more than 8% in the first back-to-back winning weeks since July. The index approached the top of a two-month trading range on hopes the global economy can dodge a new recession and the euro zone will resolve its sovereign debt crisis and recapitalize its banks.
Events in Europe overshadowed a $21 billion deal by Kinder Morgan Inc to buy rival El Paso Corp, combining the two largest natural gas pipeline operators in North America in a huge bet on the fast-growing market for that fuel.
El Paso’s shares rose more than 23% to $24.11. Kinder Morgan shares rose 5.5% to $28.38.
Corporate results moved into high gear. Wells Fargo missed Wall Street earnings estimates by 1 cent a share, though third-quarter profit rose on lower costs for bad loans. The shares fell 5.3% to $25.26.
Citigroup Inc reported higher third-quarter earnings as the bank set aside less money to cover bad loans and recorded an accounting gain banks can take in turbulent markets. The shares rose 0.5% to $28.51.
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First Published: Tue, Oct 18 2011. 04 18 PM IST
More Topics: Markets Update | USA | Stocks | EU | Germany |