U.S. Stocks Extend Losses as Merkel Cancels Speech

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http://www.bloomberg.com/news/2011-10-20/u-s-stock-index-futures-advance-ebay-shares-decline-in-germany.html

U.S. stocks extended losses as German Chancellor Angela Merkel canceled a speech to parliament on the European bailout fund because of disagreements on the role of the region’s central bank.

Bank of America Corp. and Morgan Stanley declined at least 3.1 percent, following a decline in European lenders. EBay Inc. (EBAY) slumped 6.7 percent after the online marketplace forecast sales and profit that missed some analysts’ estimates. PulteGroup Inc. and Lennar Corp. paced losses in homebuilders, dropping more than 3.8 percent as sales of existing homes declined.

The Standard & Poor’s 500 Index lost 0.7 percent to 1,201.64 at 12:04 p.m. New York time. The index climbed as much as 0.5 percent earlier. The Dow Jones Industrial Average fell 73.18 points, or 0.6 percent, to 11,431.44 today.

“It was difficult to do in the United States and it’s 17 times more difficult to do it in Europe,” Hank Smith, chief investment officer at Haverford Trust Co. in Radnor, Pennsylvania, said in a telephone interview. His firm manages about $6.1 billion. “Europe needs some sort of TARP-like facility to backstop the banks to prevent contagion. In the meantime, the market will seesaw back and forth.”