Wall St lower as banks drag on Germany, earnings
Optimism the euro zone was making progress in resolving its sovereign debt crisis has pushed the S&P 500 to the top of a two-month trading range but left it vulnerable to pullbacks. The index had risen for two straight weeks for the first time since July and recorded its best two-week performance since 2009.”The past couple of weeks have been obviously a phenomenal little run-up. The problem is it’s a delicate run-up,” said Chris Hobart, chief executive of Hobart Financial Group in Charlotte, North Carolina.German Finance Minister Wolfgang Schaeuble said European Union governments would adopt a five-point plan at the Brussels meeting on October 23, but “we won’t have a definitive solution this weekend,” he added.Schaeuble’s comments also sent the euro lower against the dollar and weighed on financials. The KBW bank index .BKX lost 2.6 percent. Compounding pressure on the sector were disappointing earnings from Wells Fargo & Co (WFC.N), which fell 6.3 percent to $24.99 and was the biggest weight on the S&P 500. <USD/>”What we are looking at today in the market is obviously a direct correlation to what is going on in Europe,” said Hobart.”Everything seems to be going well with Europe for a while, and you get this little news and it reconfirms the fears that everybody has.”The Dow Jones industrial average .DJI dropped 162.84 points, or 1.40 percent, to 11,481.65. The Standard & Poor’s 500 Index .SPX.INX lost 15.55 points, or 1.27 percent, to 1,209.03. The Nasdaq Composite Index .IXIC declined 39.89 points, or 1.50 percent, to 2,627.96.Events in Europe overshadowed a $21 billion deal by Kinder Morgan Inc (KMI.N) to buy rival El Paso Corp (EP.N), 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 surged 23.8 percent to $24.25 and Kinder Morgan shares jumped 6.4 percent to $28.62.In its quarterly results, Wells Fargo missed Wall Street’s earnings estimates by 1 cent a share as interest income fell below expectations.Shares of Citigroup Inc (C.N) edged down 0.6 percent to $28.24. The bank reported higher third-quarter earnings as it set aside less money to cover bad loans and recorded an accounting gain banks can take in turbulent markets.Of the 45 companies in the S&P 500 that have reported earnings, 62 percent have beaten analyst expectations, according to Thomson Reuters data.