Stocks Fall as Euro Worries Resurface

NEW YORK—More Eurozone worries torpedoed U.S. stocks Monday, as the Dow Jones Industrial Average fell by more than 200 points.

The Dow dropped 247 points, or 2.1 percent. The broader S&P 500 Index dropped 23.7 points, or 1.9 percent. The Nasdaq Composite Index also fell 52.9 points, or 2.0 percent.

While last week’s stock market rally was encouraging, Monday’s fall put all the major indices back in the red for the year.

Investor confidence waned after German officials said Monday that the upcoming Eurozone summit on Oct. 23 will not resolve all of the EU’s fiscal woes.

The words came after German Chancellor Angela Merkel over the weekend said that the European sovereign debt crisis would not subside anytime soon, and that a feasible package to fix the system—needing approval from all EU members—may not come for weeks or months.

Financial Stocks Fall
The financials sector was broadly lower, led by Wells Fargo & Co. and Citigroup Inc., which released earnings Monday.

While Citigroup managed to beat analyst expectations for the fiscal third quarter, Wells Fargo did not. San Francisco-based Wells Fargo, which is the nation’s biggest home lender, said that revenues fell by 6 percent, despite net income shooting higher by 22 percent compared to the same quarter in 2010.

“The economic recovery has been more sluggish and uneven than anyone anticipated,” Wells Fargo CEO John Stumpf said in a company statement. “We can’t change the economic environment, yet we have worked hard to control the variables we can.”

For Citigroup, most of its gains were due to an accounting credit of $1.9 billion due to the riskiness of its own debt. Citigroup CEO Vikram Pandit said his company’s earnings were “solid,” but reiterated that we face “a challenging economic environment” ahead, he said in a statement.

Nevertheless, Citigroup has come a long way to shed unprofitable assets under the leadership of Pandit, who has brought the bank back to profitability after requiring two federal bailouts in 2008.

As for the European debt crisis and its impact on Citigroup, CFO John Gerpsach said on a conference call with analysts that while the bank has manageable risk in that area, “it is something we are vigilant about.”

Shares of Wells Fargo (NYSE: WFC) dropped 8.4 percent on Monday, while Citigroup (NYSE: C) shed 1.65 percent.