Wall Street hit by worries before Europe debt summit
NEW YORK (Reuters) - U.S. stocks fell on Tuesday on doubts European leaders can agree on a plan to end the euro zone debt crisis, while major corporations disappointed investors with their outlooks.
Though European Union and euro zone leaders still planned to hold a summit on Wednesday, markets were spooked by news that a meeting by euro zone finance ministers was canceled.
The news fed fears that leaders will be unable to come up with the detailed plan for ending the crisis that investors want.
"There have been a number of different statements coming out that seem to suggest Europe is having a hard time coming to any real hard conclusions at solving their debt issues," said Gail Dudack, chief investment strategist at Dudack Research Group in New York.
"That alone has added a big wave of disappointment to today's market."
The S&P 500 has rallied nearly 9 percent for the month on optimism European leaders will succeed in tackling the region's debt crisis. Investors fear the impact that an uncontrolled fiscal crisis in the euro zone could have on the global economy.
On Tuesday the Dow Jones industrial average .DJI lost 205.18 points, or 1.72 percent, to 11,708.44. The Standard & Poor's 500 Index .SPX.INX fell 24.96 points, or 1.99 percent, to 1,229.23. The Nasdaq Composite Index .IXIC dropped 61.02 points, or 2.26 percent, to 2,638.42.
Adding to the pessimistic tone, 3M Co (MMM.N) reported quarterly profits that missed expectations and cut its 2011 forecast. The Dow component said the crisis in Europe was weakening consumer demand and taking a toll on profit, sending shares down 6.3 percent to $77.04.
In after-market activity, Amazon.com Inc (AMZN.O) slumped 15 percent to $193.10 after the world's largest Internet retailer reported weaker-than-expected results as it spent heavily on a new tablet computer and other long-term projects.
Other companies reporting on Tuesday included engine manufacturer Cummins Inc (CMI.N), which fell 5.1 percent to $93.81 after cutting its outlook. United Parcel Service (UPS.N) shed 2.1 percent to $69.35 after the company's chief executive said he sees the slow-growing economy continuing.
The S&P industrials index .GSPI lost 2 percent.
Netflix (NFLX.O) plunged 34.9 percent a day after the movie rental company said it lost more customers than it anticipated in the third quarter and warned of still more departures. The stock sank to $77.37.
Economic data showed U.S. consumer confidence unexpectedly dropped to its lowest level in 2 1/2 years in October, while house prices were unchanged at low levels in August, suggesting the consumer is still struggling.
Volume was light, with about 7.78 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, slightly below the daily average of 8.01 billion.
Declining stocks outnumbered advancing ones on the NYSE by 2,491 to 520, while on the Nasdaq, decliners beat advancers 2,033 to 462.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)
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