Wall Street stocks fell more than 1 percent on Monday as Germany's finance minister dampened expectations an upcoming summit would produce a breakthrough in Europe's debt crisis.
Finance Minister Wolfgang Schaeuble said a European Union meeting on October 23 would adopt a platform to address the region's financial turmoil, but we won't have a definitive solution this weekend, he added.
His statement short-circuited a stocks rally that had been fueled by optimism about progress in solving the euro zone crisis.
Schaeuble's comments also sent the euro lower against the dollar and pressured shares of financials. The KBW bank index <.BKX> lost 2.2 percent. Also weighing on the sector were disappointing earnings from Wells Fargo & Co
What we are looking at today in the market is obviously a direct correlation to what is going on in Europe, said Chris Hobart, chief executive of Hobart Financial Group in Charlotte, North Carolina.
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 131.01 points, or 1.13 percent, to 11,513.48. The Standard & Poor's 500 Index <.SPX><.INX> fell 13.29 points, or 1.09 percent, to 1,211.29. The Nasdaq Composite Index <.IXIC> lost 29.42 points, or 1.10 percent, to 2,638.43.
The S&P 500 had risen more than 8 percent for the first back-to-back winning weeks since July and the best two-week run since 2009. The index approached the top of a two-month trading range on hopes the global economy can sidestep a new recession and the euro zone will resolve its sovereign debt crisis and recapitalize its banks.
The past couple of weeks have been obviously a phenomenal little run-up. The problem is it's a delicate run-up, said Hobart.
Events in Europe overshadowed a $21 billion deal by Kinder Morgan Inc
El Paso's shares surged 23.7 percent to $24.23 and Kinder Morgan shares jumped 8.5 percent to $29.17.
Corporate earnings began to pick up steam. Wells Fargo missed Wall Street earnings estimates by 1 cent a share as interest income was weaker than expected.
But Citigroup Inc
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)