* Qualcomm and NXP Semi surge on report of tie-up talks
* Apple drops on Barclays price target cut
* Indexes end down: Dow 1.07 pct, S&P 0.93 pct, Nasdaq 0.93
(Updates to close)
By Noel Randewich
Sept 29 Wall Street dropped on Thursday, weighed
down by Apple as well as selling in Wells Fargo, Citigroup and
other major banks as investors worried about the health of
The S&P 500 financial index declined 1.49 percent
after Bloomberg reported that some hedge funds have withdrawn
excess cash and positions held at the German lender.
Growing concerns over the stability of Germany's biggest
bank have pushed its shares to record lows and its U.S.-listed
stock on Thursday tumbled 6.7 percent.
"This Deutsche Bank story is really casting a very long
shadow over equity markets," said Peter Kenny, senior market
strategist at Global Markets Advisory Group, in New York. "In
some respects, it speaks to fears over large money-center banks
having serious problems, and the last time we had that
conversation was the financial crisis."
Adding to negative sentiment in the banking sector, Wells
Fargo & Co lost 2.07 percent after U.S. lawmakers
rebuked CEO John Stumpf over his handling of sales abuses.
Citigroup dropped 2.28 percent and JPMorgan Chase
fell 1.59 percent.
Apple fell 1.55 percent after Barclays cut its
price target. The stock was the biggest drag on Wall Street.
The S&P healthcare index lost 1.84 percent and also
weighed heavily on the S&P 500 as shares of Merck and
Johnson & Johnson declined.
Among the gainers, Qualcomm jumped 6.3 percent
after the Wall Street Journal reported the chipmaker is in talks
to buy NXP Semiconductors. NXP surged 16.88 percent.
Up 5 percent this year, the S&P 500 is trading near 16 times
expected earnings, above its 10-year average of 14, according to
Thomson Reuters Datastream.
"Equity valuations are stretched and priced for perfection,"
said Mike Baele, managing director with the private client
reserve group at U.S. Bank in Portland, Oregon. "I would not be
surprised to see additional volatility."
The CBOE Volatility Index, a gauge of near-term
investor anxiety, jumped 14 percent.
The Dow Jones industrial average slid 1.07 percent to
18,143.45 points at the close, its sharpest decline since Sept
The S&P 500 lost 0.93 percent to end at 2,151.13 and
the Nasdaq Composite dropped 0.93 percent to 5,269.15.
The S&P utilities index, which is sensitive to
interest rates, fell 1.45 percent, its fifth day of losses in a
Oil prices were up a day after OPEC members agreed to curb
production, even as analysts raised questions about the
effectiveness of the deal.
Declining issues outnumbered advancing ones on the NYSE by a
3.87-to-1 ratio; on Nasdaq, a 3.09-to-1 ratio favored decliners.
The S&P 500 posted 22 new 52-week highs and 4 new lows; the
Nasdaq Composite recorded 82 new highs and 35 new lows.
About 7.7 billion shares changed hands on U.S. exchanges,
above the 7.0 billion daily average for the past 20 trading
days, according to Thomson Reuters data.
(Additional reporting by Chuck Mikolajczak in New York and
Yashaswini Swamynathan in Bengaluru; Editing by Nick Zieminski)