Wall Street falls on uncertainty over EU summit

Markets Reuters

By Chuck Mikolajczak

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Investors are hoping EU leaders will move toward a solution this weekend, a key factor for stocks to break out of their trading range.

"It's a ping-pong game -- people have been burned by reacting to individual news stories only to have them refuted, withdrawn or contradicted," said Stephen Massocca, managing director, Wedbush Morgan in San Francisco.

The Dow Jones industrial average <.DJI> dropped 73.11 points, or 0.64 percent, to 11,431.51. The Standard & Poor's 500 Index <.SPX><.INX> lost 8.22 points, or 0.68 percent, to 1,201.66. The Nasdaq Composite Index <.IXIC> declined 32.75 points, or 1.26 percent, to 2,571.29.

"Next week we will get something more definitive but at this point, to react to these individual whispers and news stories has been a fool's game," Massocca said.

The S&P 500 has struggled after reaching the top end of a two-month trading range at around the 1,230-1,250 level and progress on Europe's debt woes is critical to breaking out of that range.

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Investors are also closely watching the developing U.S. earnings season. According to Thomson Reuters data, of the 109 companies in the S&P 500 that have reported earnings, 70 percent have topped analyst expectations.

"The focus is starting to be more domestic. Here and there are some questions about the directions of earnings," said Massocca.

Ingersoll Rand Plc <IR.N> posted lower quarterly earnings, and its fourth-quarter profit forecast fell short of some Wall Street estimates, due to depressed housing and consumer markets.

Polycom Inc <PLCM.O> plunged 32.4 percent to $14.75 and weighed on the Nasdaq after the videoconferencing company reported quarterly revenue well below market expectations as sales to large companies slowed, and forecast weak fourth-quarter revenue. The NYSEArca networking index <.NWX> lost 4.3 percent.

On the economic data front, factory activity in the U.S. Mid-Atlantic region rebounded in October and the number of Americans claiming new jobless benefits fell last week, but other data showed a drop in sales of previously owned homes last month and only a small rise in a gauge of future growth.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

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