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More rumours out of Europe triggered another late day sell off in the stock markets.First, the scoreboard:

Dow: -72.4 pts, -0.6%
S&P 500: -15.5 pts, -1.3%
NASDAQ: -53.4 pts, -2.0%

And now, the top stories:

  • Europe had already made headlines again with the downgrade of Spain last night and the protests in Greece today.
  • The U.S. trading day was set up with a flurry of earnings last night and this morning.  Most notably was last night’s Apple earnings announcement, which missed expectations for the first time in years. Disappointing iPhone sales were to blame, but the weakness could’ve been due to Apple fans waiting for the next generation iPhone, which was released earlier this month.  Despite excuses, the stock sank 5.6%, dragging the Nasdaq  and S&P 500 down with it.
  • Another tech company that announced earnings last night was Intel, which crushed expectations.  Shares of the Dow stock jumped 3.6%.
  • Insurance giant travellers missed earnings expectations, thanks to catastrophe related claims tied to Hurricane Irene and Tropical Storm Lee.  However, the company made more money selling higher priced insurance policies.  Share jumped 5.7% to edge out Intel as the top performer in the Dow Jones Industrial Average.
  • Morgan Stanley came out with better-than-expected earnings, which were helped by some accounting items.  Also, the bar may have been set low, thanks to weeks of speculation regarding exposure to beleagured French banks. In fact, the bank reported negative net exposure to french banks, and the stock climbed.  The stock traded positively early in the day.
  • Two pieces of economic data came out at 8:30 am.  September CPI came in right in line with expectations at 0.3%.  Housing starts crushed expectations jumping 15% to an annualized rate of 658k.
  • Stocks were mixed throughout the day, but they started to sell off late in the afternoon.  Some attributed weakness to the release of the Beige Book.  The basic message of the anecdotal guide to the economy was that the economy grew at a moderate pace in September, which wasn’t exactly news.
  • We think the real backbreaker to the markets was a Reuters report that said French President Nicolas Sarkozy said eurozone debt talks were stuck.  This was ahead of an unscheduled meeting today among EU leaders.
  • In another late rumour, the FT reported that the European bank recapitalization plan would be smaller than expected.
  • On a separate note, shares of Green Mountain Coffee tumbled again. For more on that…
  • Don’t Miss: David Einhorn’s Presentation That Absolutely Destroys Green Mountain Coffee

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