It was a quiet start to the week after the upswing last Friday. Analysts noted that a number of the drivers of market sentiment in recent weeks — economic data and the prospect for some form of decisive action in Europe — were uninspiring.
On Monday, economic data from the United States on regional manufacturing and another report on industrial production were weak, or “market neutral,” suggesting neither a looming recession or any signs of a recession, said Jonathan Lewis of Samson Capital Advisors.
And comments from Europe after a weekend meeting of finance ministers from the Group of 20 were generally in line with expectations. The German Chancellor, Angela Merkel, was quoted by her chief spokesman, Steffen Seibert, as saying not to expect that “everything will be solved” regarding the debt crisis at the European Union summit meeting on Oct. 23, Bloomberg reported.
“We are really operating in a twilight zone for markets,” said Mr. Lewis. “We are really trading off of headlines. There is some discussion of how quickly Germany is going to support an early resolution to the sovereign debt crisis.”
As a result, he said, sentiment was weighing on stocks while giving a little lift to bonds. “We are waiting for clarity,” Mr. Samson said. “Markets like to know what to do.”
In the first hour of trading, the Dow Jones industrial average and the broader Standard Poor’s 500-stock index were each down about 1 percent, while the Nasdaq composite index was lower by slightly less than that. Both the Dow and the Nasdaq indexes had pushed higher as of the end of last week to above their levels at the end of 2010.
But the S.P. was still in negative territory, down 2.63 percent for the year.
Interest rates were slightly lower. The yield on a 10-year Treasury note was 2.1 percent compared with 2.25 percent.
“Optimism is fading,” Frank M. Pavilonis, MF Global’s senior market strategist, said, referring to Europe.
Analysts said that as financial results trickled in stocks would continue to weather the outlook for the United States economy. Financial stocks were lower in early trading on Monday, falling as a sector about 1.5 percent on the broader market. That was on a day when more banks weighed in with quarterly results.
Wells Fargo, the largest consumer lender in the United States, was down 6 percent. It reported Monday that its third-quarter earnings rose 21 percent, even as a drop in revenue indicated a disappointing sign for the San Francisco-based bank.
But Citigroup was up 2 percent after it announced a profit of $3.8 billion, or $1.23 a share, beating analyst consensus estimates of 81 cents per share.
Eric Dash and Ben Protess contributed reporting.
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