Stocks Sink on Europe, Apple, Fed Outlook

U.S. stocks dropped Wednesday on conflicting signs from Europe about a potentially bigger plan to stave off a messy sovereign default, disappointing earnings from heavyweight Apple and some signs of continued strain on the economy from the Federal Reserve’s Beige Book report. The Dow Jones Industrial Average fell 72.43 points, or 0.63%, to 11,504.62. The S&P 500 fell 15.50 points, or 1.26%, to 1,209.88. The Nasdaq Composite lost 53.39 points, or 2.01%, to 2,604.04.

Markets were sensitive to media reports on possible European efforts to leverage their bailout fund.

Apple reported earnings and revenue that came in below analyst expectations. Net income in the fiscal fourth quarter was $6.62 billion, or $7.05 per share. That was up 54 percent from $4.31 billion, or $4.64 per share, a year ago. Analysts polled by FactSet were expecting $7.28 per share. Revenue was $28.3 billion, up 39 percent.

The economy is losing steam across much of the nation, but is still growing and not in recession, according to the latest outlook from the Federal Reserve. Wednesday’s release of the so-called Beige Book, which is a summary of outlooks from the 12 district banks from across the country, certainly didn’t portray a robust economy.

EBay says its third-quarter net income climbed 14 percent, helped by growth in its online marketplace and PayPal online payment service. It earned $491 million, or 37 cents per share. This compares with $432 million, or 33 cents per share, a year earlier.

American Express Co. on Wednesday said that its third-quarter profit rose 13 percent, as its customers spent more on their cards. For the three months ended Sept. 30, the credit card company posted net income attributable to common shareholders of $1.24 billion, or $1.03 per share, compared with $1.09 billion, or 90 cents per share, in the year-ago period.