STOCKS TANK BEFORE EU MEETING THAT EVERYONE EXPECTS TO FAIL: Here's What You Need To Know

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Photo: California Bridge via flickr

It’s official. No one’s expecting anything from tomorrow’s hyped up EU leaders summit.First, the scoreboard:

Dow: -207.0 pts, -1.7%
S&P 500: -25.1 pts, -2.0%
NASDAQ: -61.0 pts, -2.3%

And now, the top stories:

  • A day before the highly anticipated Wednesday EU leaders’ summit, the U.K. told us that finance ministers (i.e. Ecofin) would not be meeting tomorrow.  Ultimately, this means that we are unlikely to get a sufficient solution to the eurozone debt crisis. This news broke early in the trading session and stocks sold off, never to recover.
  • In a bombshell report, Reuters reported that the IMF may participate in a plan to leverage the EFSF bailout.  This is big because it means the U.S. would effectively become a major player in the eurozone bailout plan.
  • We had some disappointing economic data today.  The August Case-Shiller 20-city home price index declined 3.8% year-over-year. This was just slightly worse than analysts’ expectation for a 3.5% decline.  But, it’s worth noting that the sizes of the year-over-year declines are improving.  So, the data wasn’t awful.
  • However, the consumer confidence number was awful.  The September reading came in at 39.8, which fell way short of the estimate of 46.  Among other things, the consumer is getting more pessimistic about the outlook for jobs.
  • Many of the biggest movers in the market moved on company-specific news. Last night, Netflix announced disappointing Q4 guidance. Management expects earnings per share to plummet to $0.36-$0.70 versus the $1.09 expected.  Even worse, Netflix warns that it could be unprofitable for a “few quarters” starting in Q1 2012.  Shares dropped 34.9%.
  • This morning, 3M said Q3 earnings fell 1% to $1.52 per share, which missed analysts estimate of $1.61 per share. Among other things, management blamed uncertainty and austerity in Europe. Shares fell 6.3%.
  • First Solar surprised everyone when it announced its CEO was stepping down.  Shares immediately crashed on the news.
  • MF Global, the brokerage house run by Jon Corzine, dived 47.6%. Last night, Moody’s downgraded the company to Baa3, which is one notch above junk status.  In response to the downgrade, the company released its earnings ahead of schedule. MF Global posted a net loss of 9 cents per share. Analysts were expecting a profit of 5 cents per share.
  • Amazon.com announces earnings this this afternoon.  Follow it live at Business Insider>.
  • Also, while stocks were selling off, gold prices spiked $50 per ounce to more than $1,700. Oil prices also rose.
  • Don’t Miss: The 15 Countries That Are Loving The Surge In Oil Prices

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