* VIX surges as traders hedge against stock declines* Citigroup, Wells Fargo down after banks report results* Indexes off: Dow 2.1 pct, S&P 1.9 pct, Nasdaq 2 pctBy Angela MoonNEW YORK, Oct 17 (Reuters) - U.S. stocks suffered their
worst loss in two weeks on Monday after comments from Germany’s
finance minister caused investors to fear Europe’s solution to
its debt crisis may not come fast enough.The S&P index had risen for two straight weeks for the
first time since July, riding a wave of euphoria built on
optimism that European leaders had a newfound commitment to
tackle a crisis that threatened financial stability and global
growth.The rapid rally left the market susceptible to swift
declines. German Finance Minister Wolfgang Schaeuble, speaking
of an Oct. 23 European Union summit on the debt crisis,
tempered enthusiasm, saying, “we won’t have a definitive
solution this weekend.”U.S. bank earnings also contributed to the selling
pressure. Wells Fargo & Co shares fell 8.4 percent to
$24.42 after the U.S. lender financial results fell short of
expectations.The KBW Bank index lost 3.9 percent.”The German Finance Minister basically came out and sort of
ruined the expectation that a grand plan was coming along, that
some sizable fund was being put together to recapitalize
European banks,” said Stephen Massocca, fund manager with
Wedbush Morgan in San Francisco.”Depending on the development there, we could technically
get back down to the low end of the trading range, which is
about 1,100 on the S&P.”With that in mind, investors rushed to seek protection in
the options market against losses. The CBOE Volatility index
VIX , Wall Street’s so-called fear gauge, rose 16.6
percent to 32.92, its highest one-day jump since August.The VIX is a 30-day risk forecast of stock market
volatility conveyed by S&P 500 index options; it generally
moves inversely to the S&P benchmark.The Dow Jones industrial average was down 246.58
points, or 2.12 percent, at 11,397.91. The Standard & Poor’s
500 Index was down 23.72 points, or 1.94 percent, at
1,200.86. The Nasdaq Composite Index was down 52.93
points, or 1.98 percent, at 2,614.92.Trading volume was light, with just 6.73 billion shares
exchanging hands on the New York Stock Exchange, NYSE Amex and
Nasdaq for the day, well below the year’s daily average so far
of about 8 billion.Events in Europe overshadowed a $21 billion deal by Kinder
Morgan Inc to buy rival El Paso Corp , combining
the two largest natural gas pipeline operators in North America
in a huge bet on the fast-growing market for that fuel.El Paso’s shares surged 24.8 percent to $24.45 and Kinder
Morgan shares jumped 4.8 percent to $28.19.Shares of Citigroup Inc fell 1.7 percent to $27.93.
The bank reported higher third-quarter earnings as it set aside
less money to cover bad loans and recorded an accounting gain
available to banks in turbulent markets.Of the 45 companies in the S&P 500 that have reported
earnings, 62 percent have beaten analyst expectations,
according to Thomson Reuters data.Declining stocks outnumbered advancing ones on the NYSE and
the Nasdaq by a ratio of about 5 to 1.
By Nishant Kumar and Denny ThomasHONG KONG, Oct 13 (Reuters) - Bank of America Corp (BofA)
has named Peter MacDonald as the head of its equities
business for the Asia-Pacific, according to an internal memo
seen by Reuters, a move that aligns BofA’s Asian business with
the global structure.MacDonald, who had previously worked with Goldman Sachs
Group Inc for 17 years, joined BofA in 2010 as
vice-chairman of Asia-Pacific.He was promoted to his new role after Yasuhiro Fujiwara
resigned as co-head of global capital markets for Asia-Pacific
last week, the memo said. Fujiwara was leaving to pursue
personal interests after spending nearly 14 years with BofA, the
memo added.MacDonald was responsible for setting up Goldman Sachs’
securities business in mainland China, the memo said. He was
made a partner at Goldman Sachs in 2004 and in 2009 he retired
from the firm. BofA hired MacDonald to focus on the bank’s
strategic initiatives in China.A BofA spokesman confirmed the contents of the
memo.Fujiwara and Michael Halloran were Asia-Pacific co-heads of
global capital markets, with Fujiwara responsible for the
equities business. Under the new arrangement, Halloran would
head the Asia-Pacific fixed income business, the spokesman said.BofA is among the few foreign banks still exploring a
securities joint venture in China. Such a venture allows Wall
Street banks to underwrite stocks and bonds in one of the
fastest growing securities markets in the world.MacDonald will report to Brian Brille, president of
Asia-Pacific and globally to Fabrizio Gallo, head of global
equities, the memo added.
